Computershare Ltd

CPU: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$34.60	Lrcr	Mxvhflny

Computershare Gives Reasons to be Positive Despite Another Earnings Downgrade

Apr 8, 2020

We have maintained our fair value estimate for narrow-moat-rated Computershare at AUD 17.00 per share despite the second management earnings guidance downgrade in less than a month. The main reason for the downgrade is the COVID-19-related global economic downturn and associated reductions in central bank interest rates in the United States, Canada, and the United Kingdom. Computershare generated 36% of group EBITDA from interest on client-owned cash balances in fiscal 2019 but the latest interest rate cuts means we now expect margin income to fall to USD 100 million in fiscal 2021 from USD 247 million in fiscal 2019.

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