Analyst Note| Gareth James, CFA |
Narrow-moat rated Computershare’s fiscal-year 2021 financial result was broadly in line with our expectations, and we have largely maintained our earnings forecasts. However, we’ve increased our fair value estimate by 4% to AUD 18.20 per share, which mainly reflects the time value of money boost to our financial model. At the current market price of AUD 16.46, we believe Computershare is slightly undervalued. Our fiscal 2022 EPS forecast implies 1% growth and is broadly in line with management’s 2% earnings growth guidance. The market price implies a price to earnings, or PE, ratio of 32, versus 36 at our fair value, and a dividend yield of 2.7%, or 3.3% including franking credits, versus 2.5%, or 3.0% with franking, at our fair value.