In the good books
- COMPUTERSHARE (CPU) was upgraded to Neutral from Underperform by Macquarie and to Hold from Lighten by Ord Minnett
Macquarie notes most of the information in the investor briefing dealt with near-term implications of UK mortgage services. The broker anticipates consensus expectations, which were too optimistic on both margin income and UK mortgage services, will converge with its earnings forecasts. Following delays in completing the migration of clients from the legacy UKAR platform the company has confirmed this will result in an additional $35m in costs in FY20. Following the response in the share price, Macquarie upgrades to Neutral from Underperform. Target is raised to $17.00 from $16.50.
The company has maintained FY19 guidance at its investor briefing, although highlighted some risks from UK mortgage services. An improvement in the US mortgage servicing business is expected. Ord Minnett considers guidance achievable and upgrades to Hold from Lighten. Target is steady at $16.50. This stock is not covered in-house by Ord Minnett. Instead, the broker white labels research by JP Morgan.