Morgan Stanley considers the impact of market volatility on Computershare, explaining the analyst expects corporate activity and transactional revenues in share plans to weaken by -US$60m in FY26.

Offsetting, the analyst believes Computershare can achieve expected margin income for FY25 of US$760m guidance due to relatively stable rates and improved balances. In FY26, margin income is anticipated to decline slightly to US$734m as interest rate yields are forecast to weaken by -30bps overall.

As the company reports in US dollars, the currency weakness against multiple currencies is an EPS tailwind of around 4 points annualised, and accordingly, the broker lifts EPS estimates by around 1.5% for FY25 and 2% for FY26.

The target price slips to $34.70 from $36.60. No change to Equal-weight rating. Industry View: In-Line.

Sector: Software & Services.

Target price is $34.70.Current Price is $38.19. Difference: ($3.49) - (brackets indicate current price is over target). If CPU meets the Morgan Stanley target it will return approximately -10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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