Judo Capital shares extend gains after Macquarie upgrade
Make us a preferred source
Make us a preferred source on Google
The news: Judo Capital shares extended gains in morning trade as Macquarie upgraded its rating on the SME lender after it reiterated its revised guidance for FY25 and FY26 on Tuesday.
The numbers: Judo shares were up 7% to $1.57 at midday AEST, adding to Tuesday's 5.8% gain.
Macquarie upgraded its rating on the stock from 'neutral' to 'outperform', and lifted its target price 3% to $1.75 based on projected earnings changes over the medium term.
The context: Macquarie's analysts said there were "minimal surprises" at Judo's investor day on Tuesday, commenting "it appears the business is executing well".
Judo grew its loan book strongly in May to $12 billion, the analysts noted, alleviating concerns that it was unable to achieve its full-year targets.
What they said: "Management noted that recent headwinds of elevated run-off are abating, and it can expect book growth to pick back up," the analysts said.
"In addition, funding spreads have improved as [Judo] repriced term deposits, giving us more comfort around near-term margins and earnings."
The source: Macquarie research
