Morgan Stanley has moved Computershare Limited up one notch in its coverage, changing its stance from Underweight to Equalweight and raising the broker's price objective to AUD32.40 from AUD32.10. The adjustment follows Computershare's confirmation that its active restructuring programs are scheduled to conclude by the end of the company's fiscal year 2027, after which cash-related restructuring charges will no longer be treated below the line in its financial statements.
The broker emphasised that the company has encountered a "significant and persistent deviation between statutory and underlying earnings" driven by the combination of ongoing restructuring activity and a growth-by-acquisition strategy that has produced below-the-line costs historically. As a result of the clearer end point for restructuring, Morgan Stanley has modestly increased its earnings estimates for Computershare: it lifted forecasts by 1% for fiscal 2026 and by between 4% and 6% for fiscal years 2027 and 2028. Those upward revisions reflect an expectation that a recovery in capital markets during calendar 2026 would strengthen revenue across issuer services, corporate trust, and staff share plan trading.
Key balance-sheet and valuation data were also highlighted. Computershare is trading at a price-to-earnings ratio of 22.35 and shows a low PEG ratio of 0.29, metrics the broker notes when assessing valuation relative to growth prospects. The company’s current ratio stands at 2.2, implying that liquid assets are ample relative to short-term liabilities. At its most recent quoted price of $23.45, analysis within the same data set indicates the stock may be slightly undervalued. The company also yields approximately 3.97% in dividends and has delivered consistent dividend payments for 33 years.
Morgan Stanley pointed to the stock's performance this year as a factor in the reassessment. Computershare's share price has fallen by about 8.5% year-to-date, while the ASX200 benchmark has risen roughly 3.5% over the same interval, a divergence that the broker says makes valuation appear "more reasonable."
Context for market participants
The combination of a clarified restructuring timeline, modest upward revisions to earnings forecasts and a valuation that looks less stretched after a year-to-date decline underpinned the broker's move. Investors and market analysts will be watching both the company's execution of its restructuring plan through fiscal 2027 and broader capital markets conditions in 2026, which Morgan Stanley explicitly ties to revenue improvement in several of Computershare’s client-facing businesses.