In major news on Australian stocks, Perpetual Limited (AU:PPT) gained 3.09% on Monday after the company confirmed its discussions with KKR & Co., Inc. (NYSE:KKR) regarding the potential sale of its corporate trust and wealth management unit. The company further stated that there is no guarantee of a binding agreement and the potential deal would be contingent on regulatory approvals.
In December, Perpetual’s largest shareholder, Washington H. Soul Pattinson and Co. (AU:SOL), made a bid of AU$3.1 billion ($2.03 billion) for the company, which was later on rejected.
Perpetual is a financial services company that provides a broad range of services, like investment advisory, financial planning, and corporate trustee services.
Perpetual’s Strategic Review
In December, Perpetual announced a strategic review aimed at maximising the value for its shareholders. As per this review, the company could explore additional options through a potential separation of its corporate trust and wealth management business and focus more on its asset management business.
Last week, the company announced its third-quarter update for FY24, stating that the review is on track and is currently in the final stages. According to the Q3 update, the FUA (funds under administration) for wealth management stood at AU$20 billion as of March 31, 2024. This reflected a 5% increase compared to the previous quarter, driven by favourable equity market movements. The FUA for corporate trust business remained unchanged at AU$1.2 trillion from the last quarter.
The company will provide an update on its strategic review on May 8, 2024.
Is Perpetual Limited a Buy?
Today, a top-rated analyst ,Shreyas Patel from UBS, confirmed his Hold rating on Perpetual stock, predicting a 4% upside. According to the TipRanks Star Ranking tool, Patel is a 4-star-rated analyst. TipRanks ranks financial analysts based on the success rates and average returns of their ratings. The ranking indicates an analyst’s proficiency in providing recommendations that lead to higher returns.
On TipRanks, PPT stock has a Moderate Buy consensus rating based on two Buy and four Hold recommendations. The Perpetual share price forecast of AU$27 implies an upside of 12.4% from current levels.
