Computershare falls as Morgan Stanley downgrades stock
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The news: Morgan Stanley downgraded its rating on Computershare, warning that the share registry firm will struggle to outperform against a backdrop of falling global rates.
The numbers: Morgan Stanley moved Computershare from 'overweight' to 'equal-weight' and lowered its price target 8% from $30 to $27.70.
It also cut management earnings per share (EPS) by 2% in FY26 and 4% in FY27, leaving it 3% to 4% below consensus.
Shares in Computershare were down 1.6% to $25.72 by 11am AEST.
The context: Morgan Stanley analysts said they were seeing a modest delay in corporate activity recovering as evidenced by falling numbers of deals. This could also impact margin balances, they said, though better debt capital markets activity is an offset.
The analysts noted that US and Canada rates were falling faster than they had expected, though Computershare has hedging on margin income and room to move on costs in FY25.
They forecast flat EPS in FY26 and think Computershare may struggle to outperform against a backdrop of falling global rates.
The source: Morgan Stanley research
