Generation Development's stake in Lonsec has increased to 49% from 41% after Lonsec initiated a buyback and cancelation of shares. As a result, Morgans increases its FY23 and FY24 EPS estimates by 4% and 8%, respectively, and raises its target to $1.56 from $1.47.

The analyst points out several Generation Development board members and others within the management team are acquiring small holdings directly in Lonsec, which suggests they see value in the business.

The broker also believes the proposed tax increase on Superannuation earnings for balances greater than $3m is a potential positive for Generation Development over the medium term. Add.

Sector: Insurance.

Target price is $1.56.Current Price is $1.26. Difference: $0.30 - (brackets indicate current price is over target). If GDG meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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