Perpetual Limited: Deja vu.... Another takeover offer - this time rejected by the board

Research evidence excerpt

Perpetual Limited: Deja vu.... Another takeover offer - this time rejected by the board

Siddharth Parameswaran AC Asia Pacific Equity Research

(61-2) 9003-8629 01 July 2026 J P M O R G A N

siddharth.x.parameswaran@jpmorgan.com

Investment Thesis, Valuation and Risks

Perpetual Limited (Overweight; Price Target: A$19.50)

Investment Thesis

PPT has high sensitivity to market movements due to its higher cost/income ratio in the asset

management business than many of its peers. Hence, FUM fluctuations can significantly

impact operating margins. There is also significant financial leverage, noting ~$50mn p.a.

on corporate debt. Recent quarterly trends show persistent outflows and investment

performance deterioration, which locks out any meaningful upside. On the positive side,

~33% of FY26E earnings come from the corporate trust and private wealth businesses,

which are seen as very stable and deserving of higher multiples. The WM sale, expected to

be completed by Q4 CY26, remains the primary catalyst for balance sheet deleveraging, but

clarity is still needed on execution. PPT has potential for cost savings within the asset

management business. Due to positive market movements in 4Q26 and high earnings

sensitivity, we rate PPT OW.

Valuation

Our Jun-27 PT of $19.50, is at a slight discount to our SOTP value of A$21.51 , reflecting

high earnings sensitivities in a volatile market. The discount reflects downside risks to our

forecasts from any increase in outflows amid product rationalisation and execution risks

around the debt management strategy. Our SOTP values Asset Management at 9x CY28E

NPAT, Corporate Trust at 17x and Wealth Management at 17.1x (value implied as per the

deal terms), Group costs at 10x, and Group income including seed and cash earnings at

17.9x.