After Magellan Financial Group's FY21 results, Morgans believes the earnings base is resilient with long-term growth supported by optionality within the Associate investments. 

Adjusted profit was dragged lower from share of Associate losses, and management expects a substantially lower loss in FY22 and material profitability on a 3-5 year time horizon. Adjusted profit pre-Associates was up 4%.

The broker feels proof of an investment performance turnaround will likely be required to improve weak sentiment and lowers its target price to $54.85 from $58.05 and retains its Add rating.

Sector: Diversified Financials.

Target price is $54.85.Current Price is $46.20. Difference: $8.65 - (brackets indicate current price is over target). If MFG meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2021 Acquisdata Pty Ltd., source FN Arena