Jefferies downgrades Challenger stock to Hold, raises price target

Published 19/08/2025, 10:50
Jefferies downgrades Challenger stock to Hold, raises price target

Investing.com - Jefferies has downgraded Challenger Ltd. (ASX:CGF) from Buy to Hold while simultaneously raising its price target to AUD8.35 from AUD7.60.

The financial services company reported FY25 NPAT (Net Profit After Tax) of $456 million, representing a 9% increase compared to the previous corresponding period. This result aligned with Jefferies’ estimate of $456 million and consensus expectations of $455 million.

Challenger’s performance fell within its narrowed guidance range of $450 million to $465 million provided during its third-quarter update. Key performance drivers included a higher COE (Cost of Equity) margin at 3.19% (with second-half FY25 at 3.26%) and improved contribution from Funds Managed, where net income increased by 8%.

On a statutory basis, Challenger reported NPAT of $193 million, which includes the impact of post-tax A&L (Assets and Liabilities) experience of -$255 million and significant items of -$8 million.

Looking ahead, Challenger has provided FY26 guidance of $455 million to $495 million, which implies approximately 4.2% growth at the mid-point of the range.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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