Tag: AFG

The Outperform rating and target price of $2.94 are retained.

Outperform rating, $2.94 target price and earnings forecasts are retained.

With no changes to earnings forecasts or the $2.94 target price, the broker retains its Outperform rating.

Target price rises to $3.60 from $3.40. Add rated.

Earnings risk is to the upside and the broker retains an Outperform rating. Target is raised to $3.18 from $3.06.

The add rating and $2.90 target are unchanged.

Morgans increases EPS forecasts for FY22 and FY23 by 6.8% and 8.4% due to increased net interest margin (NIM) forecasts and increased loan growth forecasts. The rating is upgraded to Add from Hold and the target to $2.90 from $2.60.

Australian Finance Group reported September quarter lodgements of $18.2bn, to mark a record going back to 2013, with lodgements up 8% from the June quarter and 16% from last September. Home Loan lodgements were up 9% year on year and 43% quarter on quarter.

Citi initiates coverage with a Buy rating and $3 target. Australian Finance Group is the second-largest mortgage broker group by affiliated brokers.

The broker has reviewed the potential earnings contribution for Australian Finance Group assuming the merger with Connective go ahead.

The broker had been on research restriction for Australian Finance Group’s capital raising but returns to retain an Outperform recommendation. Funding is now in place to support book growth, the broker notes, and margin clarity has increased with funding renewal and securitisation market activity.

Australian Finance Group’s residential lodgements increased 33% year on year in the March quarter and 34% in April, although the broker notes last April was benign given the bank Royal Commission and a pending election. Home loan lodgements were down -34% in April due to bank competition. Mezzanine funding has been secured to provide covenant relief.

The broker has cut its Australian Finance Group earnings forecasts by -3% out to FY25 following a review of credit, hardship and investment risk. The broker notes the company has no debt and $50m in cash.