On Wednesday, Goldman Sachs adjusted its stance on Computershare Limited (CPU:AU) (OTC: CMSQY), downgrading the stock from Buy to Neutral.
The revision reflects changes in currency valuation and minor adjustments to earnings estimates.
The firm's analysts pointed out that Computershare has enjoyed a substantial rise in its share price, supported by favorable macroeconomic factors, including anticipated yields and a robust U.S. dollar.
The firm's analysis indicates that the market-to-market valuation has been updated to account for the strengthening of the U.S. dollar against the Australian dollar.
Raising the price target to AUD35.50 from AUD31.00, the firm's update also incorporates slight changes to minority interest (MI) income projections and small variations in divisional earnings and margins. These adjustments have led to an increased 12-month price target for Computershare.
The analysts noted that Computershare's shares are currently trading at approximately 17 times the forecasted FY25 earnings when considering the current exchange rate between the U.S. dollar and the Australian dollar.
This valuation is deemed to be more in line with how the company has historically been priced in the market.
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