Propel Funeral Partners Ltd: Risk Reward Update

Research evidence excerpt

Propel Funeral Partners Ltd: Risk Reward Update

UpdateM

RiskRisk RewardReward– Propel- FuneralPropelPartnersFuneralLtd (PFP.AX)Partners Ltd (PFP.AX)

Competitive advantage in consolidating a market with demographic tailwinds

PRICE TARGET A$5.15 OVERWEIGHT THESIS

DCF: We use an 8.5% WACC (RF 5%, ERP 5%, beta 0.9, cost of debt 6%, 30% LT gearing). We We see brand, emerging scale, and cornered

use a 3% terminal growth rate, reflecting growth in price and market volumes. resource advantages in PFP, in a space

P/E: We consider local profitable growth comps and local/global deathcare comps on a where it competes with a market leader that

growth-adjusted basis to derive our 30x FY27e P/E multiple. has been losing share, and among a long tail

EV/EBITDA: We use 15x FY27e EV/EBITDA reflecting the growth-adjusted peer group and of independent operators. We expect

M&A optionality. structural tailwinds in terms of price growth

and death rate to endure and see scope for

A$4.90 EPS-accretive M&A catalysts.

Consensus Price Target Distribution A$3.80 A$6.00

MS PT

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates Consensus Rating Distribution

83% Overweight

17% Equal-weight

RISK REWARD CHART

0% Underweight

MS Rating

AUD

Source: Refinitiv, Morgan Stanley Research

A$7.50A$7.50(+141.94%)A$7.50(+141.94%)(+141.94%)

8 Risk Reward Themes

Pricing Power: Positive

6 Secular Growth: Positive

A$5.15A$5.15(+66.13%)A$5.15(+66.13%)(+66.13%) View descriptions of Risk Rewards Themes here

A$3.10A$3.10A$3.10

2 A$2.75A$2.75(-11.29%)A$2.75(-11.29%)(-11.29%)

JUN '25 DEC '25 JUN '26 JUN '27

Key: Historical Stock Performance Current Stock Price Price Target

BULL CASE A$7.50 BASE CASE A$5.15 BEAR CASE A$2.75

40x bull case FY27e EPS 32x base case FY27e EPS 18x bear case FY27e EPS