Fubotv earnings beat by $0.10, revenue topped estimates
Bendigo & Adelaide Bank Ltd (BEN: AU) (OTC: BXRBF) reported financial results that exceeded expectations, according to a Citi analyst. Despite the positive earnings surprise for the second half of the fiscal year, the analyst reiterated a Sell rating with a price target of AUD9.50.
The bank's shares did not reflect the upbeat results, underperforming the index by approximately 400 basis points on a day when the market was generally positive.
The analyst noted that the bank's shares have seen a significant increase, climbing from around AUD10 to approximately AUD12.50 since the May trading update.
The rally was attributed to the strong second-half performance, which was already priced into the stock, leaving little room for further appreciation based on the latest financial disclosures.
Key factors contributing to the bank's underperformance include costs that have been managed below inflation rates. However, there are expectations of higher investment spending and software amortization in the fiscal year 2025 and beyond.
Additionally, the bank's HomeSafe product, which is a significant component of its earnings, is anticipated to be increasingly discounted by the market.
Another concern highlighted was the bank's mortgage growth, which is expected to become more costly due to its reliance on wholesale funding. This reliance could pressure the bank's margins and profitability in the future.
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