Why did the Computershare (ASX:CPU) share price set another record high today?

Let’s find out.
The post Why did the Computershare (ASX:CPU) share price set another record high today? appeared first on The Motley Fool Australia. –

Shares in technology and financial services provider Computershare Limited (ASX: CPU) inching higher again today and finished trading less than 1% in the green at $20.72.

This watermark signals another record high for the company, whose share price has started the year with a bang after charging 4% in the green.

Whilst there’s been no price-sensitive info out of the $12.5 billion company by market cap, let’s take a stroll through as to what’s led us to this point today.

Computershare cruises to new record highs

It was a fulfilling year for Computershare investors in 2021. Shares rallied more than 38% across the period after setting a series of higher-highs and higher-lows in that time.

The momentum prompted analysts at Morgan Stanley to update its modelling on the company, subsequently raising its price target by 20% to $21.50.

Morgan Stanley notes that Computershare’s current “management” earnings per share (EPS) guidance calls for a 2% growth period in FY22, however, it feels this figure has the potential to be revised upward.

The broker also bakes in its views on interest rates, treasury yields and cost-budgeting efforts by the company that could materialise in FY22 to support its thesis.

This is relevant to Computershare given its exposure to interest rates at the belly of the interest rate curve, particularly up to 5-years, which are incredibly attractive to Morgan Stanley.

As a result, the broker estimates an EPS growth of 10% in FY22 for the company which it sees carrying through until FY23 and FY24.

Aside from this, ASX tech shares are back in the green today amid a softening reaction to the news that US Fed chair Jerome Powell is considering hiking rates earlier and at a faster pace than previously estimated.

The S&P/ASX All Technology Index (XTX) is also up more than 1% today after a tumultuous finish to 2021, where it has plunged 7% in the last month alone.

However, investors are regaining confidence in the tech sector, particularly as the market and strategists digest news of the intended rate hikes.

Computershare share price snapshot

In the last 12 months, the Computershare share price has gained more than 48% after rallying 5% in the past month.

Shares have started the year well and are up almost 4%, well ahead of the benchmark S&P/ASX 200 Index (ASX: XJO)’s return in that time.

The post Why did the Computershare (ASX:CPU) share price set another record high today? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Computershare right now?

Before you consider Computershare, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Computershare wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

40% drawdown: The Bank of Queensland (ASX:BOQ) share price is struggling. Is it a buy?

Made a New Year’s resolution to start investing? Here are some of the benefits of ASX ETFs

When did Webjet (ASX:WEB) last pay a dividend and when might the next one be?

Here are the top 10 ASX shares today

The Australian Ethical Investment (ASX:AEF) share price has plunged 8% today. What’s happening?

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!