NWL - Credit Suisse rates the stock as Outperform
PUBLISHED
2021-11-08
Content
Netwealth Group has proposed a merger with Praemium ((PPS)) and although the latter has rejected the offer it is "open to engagement".
Credit Suisse finds strategic merit in the transaction including the acquisition of the Praemium non-custody administration offering which could drive incremental flow through a holistic wealth offering.
A combination of the custody platforms could deliver scale and material cost synergies.
The broker believes Netwealth could increase the offer price to $2.00 a share (from $1.50) and still deliver earnings accretion of 10% while noting the threat from competing bids is low.
Outperform rating and $17.80 target maintained.
Sector: Diversified Financials.
Target price is $17.80.Current Price is $17.23. Difference: $0.57 - (brackets indicate current price is over target). If NWL meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).