UBS believes the company simplification and strategy update is well articulated, with a renewed focus on the core fleet and novated business. The cost base is expected to reduce materially by FY22.
The broker adjusts estimates to reflect an exit of Right2Drive and CarLoans in FY20. UBS envisages upside earnings risk for the medium term, from stronger net operating income growth.
Buy rating maintained. Target rises to $2.20 from $1.80.
Sector: Diversified Financials.
Target price is $2.20.Current Price is $1.72. Difference: $0.48 – (brackets indicate current price is over target). If ECX meets the UBS target it will return approximately 22% (excluding dividends, fees and charges – negative figures indicate an expected loss).
