IOOF Holdings' FVE Lowered on Near-Term Challenges but Long-Term Fundamentals Remain Intact

We have lowered our fair value estimate for narrow moat-rated IOOF Holdings by 6% to AUD 10.30 from AUD 11.00 per share following a review of our earnings forecasts. A softer-than-expected funds flow update for the September quarter and a reassessment of our funds under management and administration, or FUMA, growth assumptions has seen our fiscal 2017 underlying net profit after tax cut by 4.0% to AUD 173.5 million. Our forecast five-year compound annual growth EPS declines to 3.9% from our previous forecast of 4.7%.