Computershare tumbles after Morgan Stanley downgrade
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The news: Computershare was one of the worst performing ASX 200 stocks in morning trade after Morgan Stanley cut its rating and price target on the share registry firm.
The numbers: Shares were down 3% to $39.62 at 11:50am AEST, having advanced more than 50% over the last 12 months.
Morgan Stanley downgraded Computershare from 'equal-weight' to 'underweight' and trimmed its price target from $34.60 to $33.70.
The context: Analysts said Computershare's valuation "appears full", with tailwinds from the market's recovery priced in.
They noted that recovering capital markets support revenue derived from corporate transaction fees and employee share plan trading.
However, they expect growth in management earnings per share to moderate due to downside risks to margin balances alongside lower interest rates.
Morgan Stanley downgraded Computershare from 'overweight' to 'equal-weight' last September, saying the company may struggle to outperform against a backdrop of falling global rates.
The source: Morgan Stanley research
