Numis highlights positive momentum at Investec

21st Mar 2014 10:15

Numis Securities has upgraded its forecasts for Investec after the specialist banking group and asset manager reported an 'improved performance' in its pre-close trading update this week.The broker has lifted its earnings per share (EPS) estimates for this year (ending March) by 4.5% to 37.4p. EPS forecasts have also been raised by 7% next year to 39.7p and by 7.6% to 46.7p the year after."These upgrades reflect better-than-anticipated balance sheet growth a continued strong performance from the high value asset and wealth management businesses and a continued improvement in credit quality."Numis highlighted company guidance for adjusted EPS in pounds to be 0-7% higher than the previous year despite a 20% depreciation of the rand-pound exchange rate."The business appears to have some positive momentum now and we believe Investec is one of the few significant recovery plays amongst the specialist UK lenders. "We believe this will become even more apparent once Kensington and the Australian back book assets are disposed of."A 512p target price has been maintained.BC