Citi asks investors to keep buying 'inexpensive' Perpetual and Challenger

Challenger

17/03/2025 19:57

** Analysts at Citi recommend "buy" rating on Australia's Perpetual PPT.AX and Challenger CGF.AX as the stocks are inexpensive

** Perpetual, an asset manager, has been looking to sell its wealth management business, which brokerage flags should attract a sufficient amount to reduce debt significantly

** Says the midpoint of FY25 earnings outlook for Challenger, a fund manager, is achievable and its return on equity target is within reach

** Cost control looks strong and we also believe the stock is not particularly expensive, says Citi for Challenger

** Brokerage also expects some sources of potential upside with stock transfer co, Computershare CPU.AX, including an ongoing pickup in debt issuance and the continuation of buoyant transactional activity

** However, CPU's share price has rallied strongly of late and we therefore see the stock as fully valued - Citi

** Rates CPU "neutral" and has A$40.90 PT

 (Reporting by Rishav Chatterjee in Bengaluru)

 ((Rishav.Chatterjee@thomsonreuters.com;))