Suncorp Group (SUN): Travelled each and every highway, and still going strong.

SUN’s headline 2015 results were largely ahead of consensus. The key headline items were: (1) cash NPAT $1,191m (BP $1,185m, consensus $1,143m); (2) cash EPS 93cps (BP 93cps, consensus 89cps); (3) final ordinary dividend 38cps and special dividend 12cps (BP 45cps and special dividend 15cps, consensus 33cps and special dividend 23cps) – all fully franked; (4) GWP $8.9bn (BP $8.8bn, consensus $8.8bn); and (5) reported margin 11.4% (BP 9.7%, consensus 10.6%). We have made immaterial changes to overall Group earnings with little change in General Insurance numbers and upgrades in SUN Bank offsetting downgrades in the Life business. However, the price target is increased to $15.50 (previously $14.50) after lowering the discount rate from 11% to 10% in line with a lower risk free rate. The Buy rating is maintained for this rejuvenated “Cash and Growth” story. Read the full report - (VIEW LINK)