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Computershare Ltd CPU

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Morningstar’s Analysis

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Capital Allocation


Computershare Still Undervalued Despite Weak Fiscal 2021 Result

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.

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Company Profile

Business Description

Computershare has grown via global acquisition to become the world's leading provider of share registry services, constitutes around 60% of group EBITDA. The remaining 40% largely comprises mortgage administration services in the United States and United Kingdom. Around a third of group EBITDA is generated by interest on client-owned cash balances, or margin income, which is exposed to interest rate movements.

452 Johnston Street, Yarra Falls, Abbotsford
Melbourne, VIC, 3067, Australia
T +61 394155000
Sector Financial Services
Industry Capital Markets
Most Recent Earnings
Fiscal Year End Jun 30, 2022
Stock Type
Employees 12,009