Citi cuts PT on Netwealth Group on weaker qtrly flows and grim outlook; shares slide

Netwealth

19/01/2023 02:53

(Updates)
    ** Shares of Australia's Netwealth Group  NWL.AX  slump up
to 11.5% to A$12.33 in their biggest intraday pct loss since Feb
16, 2022
    ** Citi trims PT to A$13.50 from A$13.85, owing to higher
than normal qtrly outflows and a higher than expected growth in
operating expenses (opex)
    ** The wealth manager says uncertain economic environment
combined with recent changes in market sentiments has impacted
inflows in H1 2023
        ** NWL cuts FY23 funds under administration (FUA) net
inflows forecast to about A$11 bln ($7.60 bln) from an earlier
estimated range of A$11 bln to A$13 bln
        ** Citi notes while flows have been weaker than
expected, pipeline is strong and earnings is seen growing ~27%
in FY23
  
        ** Broker sees NWL's positive win-rate for new
businesses to underpin H2 2023 and FY24 flows
  
        ** Citi raises full year opex forecast to A$111 mln and
sees EBITDA margins declining 46.5% to lowest margins since FY17
  
    ** Stock hits its lowest level since Jan 6, top loser on ASX
200 benchmark index  .AXJO 
    ** NWL up over 15% YTD
($1 = 1.4474 Australian dollars)
 (Reporting by Echha Jain in Bengaluru)
 ((Echha.jain@thomsonreuters.com))