Following in-line FY22 results from Smartgroup Corp, Morgans feels forward earnings now have more certainty as indicated by a solid revenue pipeline and contract opportunities. Lease demand (led by electric vehicles) is expected to build momentum though 2023.

The analyst points out strong cash flows and a solid balance sheet has allowed Smartgroup to payout 100% of earnings. The 2H dividend of 29cps included a 15cps special dividend.

The broker raises its target to $6.70 from $5.65 and maintains its Add rating.

Sector: Commercial & Professional Services.

Target price is $6.70.Current Price is $6.31. Difference: $0.39 - (brackets indicate current price is over target). If SIQ meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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