Suncorp Group FY19 cash earnings of A$1.15bn are mostly inline with estimates.
The insurance margins are ahead of forecasts and the positive surprise that has lifted the share price is the announcement of the $0.44 final dividend plus $0.39 capital return.
The capital return of $500m is expected on the 24th of October subject to approval at the AGM.
Suncorp Group is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
We see buying support building at $13.25 and our upside target for the stock is $14.00+.
SUN goes ex-div $0.40 on the 15th August and adding a covered call option into November will help boost the cash flow return.
Suncorp Group is under Algo Engine sell conditions following a lower high formation at $13.50.
We see reduced scope for Suncorp to reprice mortgages, given the
current political and regulatory climate, and we expect to see ongoing margin
Stay on the short side and watch for the share price to trend lower with the 10 day average crossing below the 50 day average as a reference point.
Our ALGO engine has triggered another buy signal for SUN into yesterday’s ASX close at $13.68.
SUN has been a popular short CFD position on our SAXO Go trading platform since trading at $15.50 two months ago.
We now suggest that investors holding short SUN positions buy them back to close the trade.
After our first ALGO signal on October 2nd, we suggested that SUN would be a reasonable buy/write strategy near the $13.60 support line.
Ongoing deleveraging in the domestic market may challenge the $13.60 price point and we will update SUN in a future posting.
Our ALGO engine triggered a buy signal for Suncorp into yesterday’s ASX close at $14.20.
This “higher low” pattern is referenced to the intra-day low posted on June 14th at $13.70.
Shares of SUN have dropped over 10% during the last month as the potential for fines and increased regulations from the Royal Commission have weighed on both banking and insurance stocks.
However, the technical picture is beginning to look oversold. As such, we consider SUN a buy/write opportunity near the key support level of $13.60.
Our ALGO engine triggered a buy signal for SUN into yesterday’s ASX close at $14.32.
This “higher low” pattern is referenced to the low of $13.27 posted on January 6th.
As illustrated on the chart below, we still see scope for SUN to probe lower on fundamental headwinds impacting both the banking and insurance sectors.
As such, we will look for the stock to trade lower, into the $13.00 handle, before committing funds to the long side.
Since posting a low of $13.30 on June 1st, shares of SUN have rallied over 11% and reached a 1-year high of $14.80 on Friday.
The selling pressure from the May 25th ACCC report on insurance rates seems to have subsided for now. However, the scaling back of margins and other industry headwinds are still in play.
Technically, internal momentum indicators show that the share price is in overbought territory and a short-term correction is likely.
We see strong resistance in the $15.00 area and initial support just above $13.80.
Investors can trade the short side of SUN on our SAXO Go CFD platform. For more information about trading opportunities with CFDs, call our office at 1-300-614-002
Our Algo Engine recently triggered a sell signal in Suncorp and we highlight the resistance beginning to build at $14.10
The short-term momentum indicator is now trending lower which suggests $13.50 is a reasonable downside target.
It was announced today that BOQ and SUN will be forced to send executives to face questioning from the royal commission when hearings resume later this month.
According to Kenneth Hayne, the line of questioning will focus on lending practices to small businesses over the last 10 years, many of which were tipped into default.
Our ALGO engine triggered a sell signal in SUN on November 9th at $14.20. Since then the stock has traded as low as $12.60 and is now back in the sell-zone near $14.20.
BOQ shares pushed against resistance at the $10.50 level last week and we have a medium-term downside target of $9.60.
Recent research on SUN has outlined a number of earnings hurdles the company will face for the rest of 2108 and into next year.
The hurdles include a higher trajectory of operating costs, findings of the royal commission on the insurance industry and lower Gross Written Premium growth.
All of these combined will likely lead to a lower underlying profit margin outlook.
Technically, our ALGO engine triggered a sell signal last November at $14.20 and we see price resistance in this area.
Our initial downside target is $13.35, followed by $12.90 over the medium-term.