The company has announced its capital position at the end of March amid a de-risking of its investment portfolio. Credit Suisse calculates investment experience losses, not disclosed, represent around 6.5% of the investment assets.
The broker assesses Challenger could withstand a further step down in investment markets similar to what has already been seen in March. Given the strength of its position, an equity raising is considered unlikely.
Neutral rating maintained. Target is reduced to $4.25 from $5.40.
Sector: Diversified Financials.
Target price is $4.25.Current Price is $4.02. Difference: $0.23 – (brackets indicate current price is over target). If CGF meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
