Smartgroup Corp's 1Q earnings run-rate was flat when compared to the level in the 2H22 though Morgans notes forward metrics support positive 2H23 growth.

The broker expects electric vehicle (EV) policy will drive incremental demand in the corporate segment and a higher short-term lease yield. EVs were more than 20% of quotes and orders in the quarter, up from negligible levels in the previous corresponding period.

 While Smartgroup Corp's price earnings multiple has risen, Morgans feels it is not stretched and retains an Add rating. The target rises to $7.50 from $6.70 after a roll-forward of the multiple and after upgrading FY23-25 EPS forecasts.

Sector: Commercial & Professional Services.

Target price is $7.50.Current Price is $6.94. Difference: $0.56 - (brackets indicate current price is over target). If SIQ meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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