Macquarie considers impairment levels in the March quarter are unsustainable. The broker continues to expect margin pressure and believes the company needs to lower its margin guidance range by -5-10 basis points in FY20.
Given the prospect of lower FY20 guidance being announced at the results in August, the broker envisages downside risk to forecasts and thus maintains an Underperform rating. Target is raised to $13.35 from $13.00.
Sector: Insurance.
Target price is $13.35.Current Price is $13.60. Difference: ($0.25) – (brackets indicate current price is over target). If SUN meets the Macquarie target it will return approximately -2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
