iSelect (ISU): Upgrade in price target

Bell Potter

Stockbroker

ISU announced it has come to an agreement to receive a cash settlement for its outstanding NIA Health loan facility. We believe this is a very good outcome for the following reasons: 1. Higher value than anticipated - We valued the NIA loan facility separately at $39.6m vs $42.1m cash to be received; and 2. Enhanced product suite - This deal has further enhanced ISU’s depth of health insurance product by adding GMHBA as well as retaining Health.com.au on a cash upfront commission basis. Based on this announcement, we have made minor upgrades to FY16 & FY17 earnings due to changes in interest revenue assumptions. We have updated our Price Target for the NIA loan settlement and rolled forward our DCF ahead of next month’s FY15 result. We have also added a 15% premium to our valuation to account for the prospect of capital management initiatives. As a result our Price Target has increased to $2.10 (previously $1.65). We retain our BUY recommendation. Read our report (VIEW LINK)


Bell Potter Securities is a leading Australian stockbroking, investment and financial advisory firm that provides a comprehensive offering of financial services to a diversified client base that includes individuals, institutions and corporations.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.