Morgan Stanley is looking for Judo Capital to maintain guidance for FY24 and FY25 with 3Q24 profits before tax of circa $26m to be announced at its upcoming results this week.

The market will be focusing on possible slower loan growth and the trends in both lending and term deposit margins as well as any comments on credit quality.

Looking ahead, the analyst is forecasting annual loan growth of $1.7bn over the next 5-years, but for Judo Capital to achieve a return on equity in the low-to-mid teens bby 2028, the loan book would need to grow at near $2.5bn annually.

Equally, Morgan Stanley considers that it will most likely take longer for the bank to achieve some of its metric goals.

Equal weight rating and $1.25 target price are unchanged. Industry View: In-Line.

Sector: Banks.

Target price is $1.25.Current Price is $1.40. Difference: ($0.15) - (brackets indicate current price is over target). If JDO meets the Morgan Stanley target it will return approximately -12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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