Analysts lift Pinnacle forecasts after better-than-expected profit
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The news: Analysts have lifted their earnings estimates for Pinnacle after the investment manager reported a better-than-expected half year profit and higher funds under management.
The numbers: Pinnacle posted half-year net profit of $75.7 million, up 151% from a year ago, largely on the back of a doubling in its share of profits from affiliates.
It prompted Macquarie analysts to upgrade their earnings forecast for the company, and also lift the 12-month price target on the stock to $27.37 from $26.70. UBS analysts also lifted their price target to $25.20 from $22.50.
Pinnacle shares are up more than 4% to $26.23 in early trading on the ASX.
The context: Pinnacle said its aggregate affiliates funds under management were up 41.1% over the half year to $155.4 billion at December-end, with continued long-term outperformance across many affiliates. Net inflows were $6.7 billion during the period.
Macquarie analysts, who have an ‘outperform’ rating on the stock, said the growth outlook for the investment manager remains strong, and are forecasting earnings growth at 28% compound annual growth rate CAGR between FY24 and FY27.
What they said: “It was pleasing that the continued alpha generation of nine affiliates resulted in strong performance fees during the half,” Pinnacle chair Alan Watson said.
The sources: ASX announcement, Macquarie research, UBS research
