Generation Development's 1H underlying profit was a -12% miss versus Morgans forecast as the Investment Bond (IB) business experienced lower average funds under management (FUM) growth. The Lonsec performance impressed.

The analyst attributes the slower growth in the IB segment to volatile markets, a tougher sales environment and rising expenses. However, assets under administration (AUM) growth of 10% in IB demonstrated the compounding nature of the business.

The broker expects higher costs linked to the Lifetime annuity build-out, which is largely responsible for lower FY23 and FY24 EPS forecasts. The target falls to $1.47 from $1.50. Add.

Sector: Insurance.

Target price is $1.47.Current Price is $1.30. Difference: $0.17 - (brackets indicate current price is over target). If GDG meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2023 Acquisdata Pty Ltd., source FN Arena