MMI HOLD­INGS

Finweek English Edition - - INVESTMENT -

SBG Se­cu­ri­ties an­a­lyst Risto Ke­tola has a neg­a­tive on the out­look for the group fol­low­ing a re­cent trad­ing up­date. The stock was pre­vi­ously rated as a “Hold”. Ke­tola has a 12-month price tar­get of R22.50 on the share and cal­cu­lates that the sum of the parts (SOTP) val­u­a­tion comes in at R21.31. In a note to clients he said: “In short we be­lieve that MMI should, like Lib­erty and Old Mu­tual, trade at around par­ity to their stated em­bed­ded value and thus the cur­rent 9% pre­mium to EV is ex­ces­sive. We should also point out that MMI’s for­ward earn­ings mul­ti­ple of 10.9 times is not par­tic­u­larly at­trac­tive to us in light of our ex­pec­ta­tion for mid-sin­gle digit earn­ings growth be­yond FY13E.”

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