Steadfast's buyout of ISU Group unlikely to be last US acquisition - Morningstar

Steadfast

08/10/2023 19:52

** Morningstar says Australian general insurance broker
Steadfast Group's  SDF.AX  acquisition of U.S. private insurance
agency ISU Group is unlikely to be its last acquisition in the
U.S., thinks the approach is logical 
    ** "We like that this is a small acquisition, giving SDF a
foothold to better understand the market and opportunities
without putting material capital at risk" - Morningstar
    ** Says SDF's acquisition of ISU expected to be EPS
accretive but EBITDA of A$8 mln ($5.08 mln) is small in context
of brokerage's prior FY24 EBITDA forecast of A$517 mln 
    ** Brokerage says the fragmented U.S. market presents good
opportunities for SDF to make more acquisitions and places it in
a good position to win market share organically by attracting
members of other networks with a superior offering
    ** Retains fair value estimate of A$6.00 for SDF 
    ** Five of 11 analysts rate the stock "buy" or higher and
six "hold"; their median PT is A$6.40 – LSEG data
    ** SDF stock up 1.3% YTD, as of last close 

($1 = 1.5733 Australian dollars)

 (Reporting by Echha Jain in Bengaluru)
 ((Echha.jain@thomsonreuters.com))