Morningstar trims PT on Australia's Credit Corp on rapid rate hikes

Credit

24/10/2023 21:27

** Morningstar cuts PT on Credit Corp Group Ltd  CCP.AX  to
A$15.00 from A$22.50
    ** Consumer lender said on Tuesday it cut its FY24 statutory
net profit after tax forecast to a range of A$35 mln ($22.25
mln) to A$45 mln from a range of A$90 mln to A$100 mln
    ** Brokerage says it cut its margin and revenue growth
forecasts, expecting a fall in profit compared to last few years
    ** "The rapid interest rate increases in 2022-23, the
fastest since Credit Corp’s listing in 2000, pose a greater
threat to earnings than previously thought" - Morningstar
    ** Flags rapid rate rises have historically preceded an
economic downturn, which for CCP means greater defaults and
higher impairment for debt ledgers
    ** Four of 7 analysts rate the stock "buy" or higher and 3
"hold"; their median PT is A$18.90– LSEG data
    ** Stock down 34% YTD, based on last close


($1 = 1.5733 Australian dollars)

 (Reporting by Aaditya Govind Rao in Bengaluru)
 ((Aaditya.GovindRao@thomsonreuters.com;))