Computershare slides as UBS downgrades to 'sell'
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The news: Shares in Computershare lowered after UBS downgraded its rating on the share registry firm for the second time in four months.
The numbers: Shares were down 3.2% to $39.77 at 12:50pm AEST, having advanced 50% over the last 12 months.
UBS downgraded Computershare from 'neutral' to 'sell' and lifted its price target from $37.40 to $39. UBS previously downgraded its rating on the company from 'buy' to 'neutral' in January.
The context: UBS analysts said that since its first-half result, Computershare has continued to outperform despite a lower yield outlook and heightened market volatility providing a risk to short-term transactional revenues.
The analysts expect Computershare to track its FY25 earnings-per-share (EPS) growth guidance of around 15%, given industry feedback suggested third-quarter employee share plan trading remained robust and industry data points to solid corporate action and corporate trust issuance activity.
However, they flagged that lower margin income yields are likely to constrain EPS growth in fiscal 2026.
The source: UBS research
