Analyst Andrei Stadnik of Morgan Stanley maintained a Sell rating on Magellan Financial Group Ltd, retaining the price target of A$7.40.
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Andrei Stadnik has given his Sell rating due to a combination of factors affecting Magellan Financial Group Ltd’s financial outlook. One of the primary concerns is the anticipated reduction in base fees, which is expected to be a headwind into FY26. The company plans to cut fees for a significant portion of its funds under management, which could negatively impact revenue. Additionally, while the company announced a special dividend, the regular dividend was slightly below expectations, indicating potential challenges in sustaining dividend payouts.
Another factor influencing the Sell rating is the company’s core earnings, which appear softer when excluding one-time items like distribution income and contributions from associates. This raises questions about the sustainability of Magellan’s earnings given its evolving business mix. Furthermore, the company’s cash reserves are projected to fall below a critical threshold after accounting for dividends, which may limit its ability to issue further special dividends. These elements combined suggest a cautious outlook for the company’s financial performance in the near term.
According to TipRanks, Stadnik is a 4-star analyst with an average return of 6.6% and a 54.66% success rate. Stadnik covers the Financial sector, focusing on stocks such as Suncorp Group, ASX , and Insurance Australia Group Limited.