Sharechat Logo

NZX upgraded to 'hold' from 'sell' by brokerage Craigs after share price underperforms

Wednesday 30th October 2013

Text too small?

NZX, the stock exchange operator whose shares have lagged behind its own benchmark index in the past year, was upgraded to 'hold' from 'sell' by brokerage Craigs Investment Partners.

Shares in NZX recently slipped 0.8 percent to $1.26 and have gained just 1.6 percent in the past year compared to the NZX 50 benchmark's 23 percent gain.

"Following recent underperformance NZX's share price is now trading on a reasonable forward price-to-earnings ratio of 23 times and in line with our discounted cash flow-derived price target of $1.24," Craigs analysts Stephen Ridgewell and Bryant Cheong said in a note. "We continue to view NZX as a high quality, well managed business. Accordingly, we upgrade to hold (from sell)."

Craigs increased its price target to $1.24 from $1.20 and raised its 2013 net profit forecast by 4.7 percent to $14 million, reflecting higher revenue and lower tax. The Australian stock exchange operator trades on a lower price-to-earnings ratio of 18x, the analysts said.

The stock exchange operator is likely to update the market on its dividend and capital management policies within the next three to six months, and a 100 percent payout ratio is sustainable given its low debt and minimal capital needs, the analysts said.

 

BusinessDesk.co.nz

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Govt opts for sweeping review of 'underperforming' RMA
AFT gains Australian registration for intravenous Maxigesic
24th July 2019 Morning Report
Should Fletcher Building persist with Australia?
NZD weaker as greenback gains on news US-China trade talks to recommence
MARKET CLOSE: NZ shares extend gain as Mainfreight, A2 hit new highs
StretchSense directors appoint administrators
NZ dollar falls on news RBNZ is looking at "unconventional" policy
Wrightson capital return gets shareholder approval
Morrison & Co eyes asset sales from first PIP Fund

IRG See IRG research reports