The broker has reviewed the potential earnings contribution for Australian Finance Group assuming the merger with Connective go ahead. The Court still needs to resolve a dispute between Connective shareholders but the broker estimates 17.6% earnings accretion fom the merger pre revenue synergies in FY22.
Outperform retained and target rises to $2.34 from $1.93 despite the broker not yet incorporating the merger into its earnings forecasts, pending the legal outcome.
Sector: Banks.
Target price is $2.34.Current Price is $1.96. Difference: $0.38 – (brackets indicate current price is over target). If AFG meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
