Challenger extends losses despite rating upgrade from Macquarie
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The news: Challenger extended losses on the ASX after enduring a two-day sell-off, even as Macquarie analysts upgraded the stock to 'outperform'.
The numbers: Challenger shares slipped 1.1% to $6.17 by 2:20pm AEST, having fallen 11% over the previous two trading days.
The sell-off was triggered by the decision by Apollo to reduce its shareholding in Challenger from 20.1% to 9.9%.
However, Macquarie upgraded its rating on the stock from 'neutral' to 'outperform' and left its 12-month price target of $7 unchanged.
The context: Macquarie analysts said they upgraded their rating on Challenger following the recent stock price move, with "no change to the underlying economics of the business".
They said they are not aware of any reason why the remaining tranche of Apollo's interest shareholding would be sold. Challenger's capital position also remained strong and the company remained on track to meet its return on equity targets in FY25, they noted.
The source: Macquarie research
