Computershare: Expectation for Strong Financial Performance Remains

We marginally lift our fair value estimate for Computershare to AUD 26.00 per share from AUD 25.50, reflecting the time value of money. Shares appear fairly valued at current prices. We expect the yield on client balances to peak in fiscal 2024 and gradually decline after that. Current futures curves suggest a relatively slow decline in global interest rates in fiscal 2025 due to persistent inflationary pressures but a more substantial drop in fiscal 2026 and beyond. We project margin income yields to decrease to around 1.66% of average client cash balances by fiscal 2028 from 2.84% in fiscal 2024. This is still higher than the 0.56% seen in fiscal 2022, partly due to the firm's efforts to lock in a portion of margin income at elevated rates.