Australia's Link Administration to see rev pressure -Citi

PEXA

25/01/2023 04:56

** Citi expects Australia's Link Administration  LNK.AX  to
likely shrink to its core of retirement and superannuation
solutions (RSS) and corporate markets businesses after the sale
of all it's share in PEXA group
    ** Citi expects Link's RSS buisness to grow ~5%-10% per yr,
but expects two businesses, incl banking & credit management, to
struggle in the current environment
    ** Expects LNK to see rev pressure in at least three of its
four businesses, but also expects it to meet it recently
reiterated FY23 earnings forecast
    ** Citi expects LNK to deliver considerable offsetting cost
reduction to overcome the revenue pressures
    ** Citi keeps 'neutral' on LNK, but "adjusts" PT to A$2.00,
which is the second-lowest among the eight brokerages covering
the stock, per Refinitiv data; LNK currently at A$1.9375
    ** The mean rating of 8 brokerages on LNK is the equivalent
of "hold", while their median PT is A$3.40 – Refinitiv data
    ** Stock has fallen 1.8% this year, as of last close; stock
had slid ~30% in 2022
 (Reporting by Nausheen Thusoo in Bengaluru)
 ((Nausheen.Thusoo@thomsonreuters.com;))