EUREKA GROUP HOLDINGS LIMITED (EGH)
Share Price Analysis and Chart

19/11/2024

1

Add

$0.80

35.59%

Morgans resumes research coverage of Eureka Group following the completion of a $70.4m equity raising to acquire 479 additional dwellings for $49.9m and a $7.5m investment in village expansion projects.

Management expects the expansion and acquisitions to contribute to underlying EBITDA growth of at least 16% in FY25, with EPS growth of 8%.

Following the equity raising, the broker notes Aspen Group ((APZ)) sold 50% of its holding in Eureka Group, reducing its stake to 13% from 38%.

Morgans forecasts assets under management to grow at 10% per annum from FY24 to FY27, with an estimated compound annual growth rate in EPS of 9% over the same period.

The target price increases to 80c from 75c. The Add rating remains unchanged.

FORECAST
Morgans forecasts a full year FY25 dividend of 1.50 cents and EPS of 3.20 cents.
Morgans forecasts a full year FY26 dividend of 1.70 cents and EPS of 3.50 cents.

27/11/2024

1

Initiation of coverage with Buy

$0.70

18.64%

Moelis initiates coverage on Eureka Group with a Buy rating and a 70c target price.

The broker highlights the group is the largest seniors' rental village operator in an undersupplied market, expected to grow at a 3% p.a. compound rate over the next decade.

Eureka recently raised equity, strengthening the balance sheet and reducing gearing to 8% from 37%. Moelis believes the funds deployed will be EPS accretive.

The analyst forecasts EPS growth of 12% p.a. for the next three years. Eureka trades at a 16% premium to NTA.

FORECAST
Moelis forecasts a full year FY25 dividend of 1.50 cents and EPS of 3.30 cents.
Moelis forecasts a full year FY26 dividend of 1.80 cents and EPS of 3.80 cents.