Perpetual (ASX: PPT) has released its 1Q22 business update, showcasing a solid performance and positive prospects.

Key Highlights

Perpetual Asset Management (PAM) Growth

AUM growth of 3% in Perpetual Asset Management (PAM) to A$101bn. Return to positive PAM inflows, totalling +A$0.1bn.

Corporate Trust and Perpetual Private Expansion

There has been 5%-9% FUA growth in Corporate Trust. Perpetual Private experiences 9% growth in FUA, reaching A$18.5bn.

Financial Outlook

Upgrade of PPT FY22F/FY23F earnings by 2%/4%. Our price target increased based on this outlook. Relatively undemanding valuation at ~16x FY22F PE.

1Q22 Update Details

In the 1Q22 update, PAM's total AUM reached A$101bn, with notable improvements in net inflows, particularly in Perpetual Asset Management Australia (PAMA). Corporate Trust and Perpetual Private also demonstrated substantial growth.

Despite mildly positive PAM fund flows, the overall trend is encouraging, and the recent acquisitions of Barrow Hanley and Trillium position PPT for a robust global investment management platform. With CEO Rob Adams leading the way, the company's valuation remains undemanding, presenting an attractive investment opportunity.

Investment Outlook

The recent acquisitions lay the foundation for PPT's global expansion, potentially driving significant share price upside. Trading at ~16x FY22F PE, the valuation is seen as undemanding, warranting an "ADD" recommendation.

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

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News & Insights

Explore Perpetual's robust 1Q22 performance, marked by positive growth in Asset Management, Corporate Trust, and Perpetual Private, along with upgraded earnings and an undemanding valuation.
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