Suncorp-Metway (SUN) Share Trading Recommendation

Submitted by Craig Strzelecki on 16 March, 2007 - 20:56

Suncorp-Metway (SUN) has a Neutral 2 shares recommendation and a price target of $23.20 from analyst UBS. The shares analyst is looking forward to the Re-commencement of trading on the stock exchange for the bank on Friday March 16th. Shares will trade on an ex-entitlement basis tomorrow (ASX code SUN). Shares issued to PMN shareholders under the scheme will also commence trading tomorrow, on an ex-entitlement & deferred settlement basis (ASX code SUNN), with normal settlement from March 21st. A choppy market & mixed investor response to the 27% entitlement discount cloud expectations on tomorrow’s trading outcome. The analyst expects share price re-basing given the $20.57 theoretical ex-entitlement price & the flat (+0.4%) ASX 200 price index since last Friday. They estimate a post-merger valuation range of $22-$24 & remain neutral on SUN (Neutral 2, $23.20 PT). The analyst see post-completion risks to the upside (synergies, releases, capital management) & downside (revenue attrition, integration costs). Their sense is that Suncorp-Metway would present good value in sub-$20 territory. Their SOTP based PT is stand alone, ahead of the 20th March scheme implementation date. QBE remains our top GI pick (Buy 2, $34.35 PT: locked in growth, acquisition upside), followed by IAG (Buy 2, $7.05 PT: signs of improvement in domestic personal lines, offshore operations upside, possibility of market share gains during SUN/PMN integration).

Suncorp-Metway Limited is listed on the Australian Stock Exchange (ASX) under stock code SUN. You can view their investor website here. SUN was listed on the ASX on 7 July, 1988. John Story is the chairman of Suncorp-Metway and the CEO is John Mulcahy. The Suncorp Group is one of Australia's leaders in banking, insurance, investment and superannuation. The Group focuses on retail consumers and small to medium businesses. Providing banking, insurance, superannuation and funds management products and services to the retail, corporate and commercial sectors. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade SUN. Check your charts and good luck with your share trading!