Perpetual Limited: FY26 preview: M&A optionality and defensiveness now fairly priced after share run-up; could be upside from uncertain takeover, but we move to Neutral on weak AM flows

Research evidence excerpt

Perpetual Limited: FY26 preview: M&A optionality and defensiveness now fairly priced after share run-up; could be upside from uncertain takeover, but we move to Neutral on weak AM flows

Siddharth Parameswaran AC Asia Pacific Equity Research

(61-2) 9003-8629 30 July 2026 J P M O R G A N

siddharth.x.parameswaran@jpmorgan.com

catalyst.

• Expenses and significant items: PPT improved FY26 total expense growth guidance to

the lower end of ~1-2%, aided by FX and continued cost discipline under the

Simplification Program (A$70m-80m annualised savings target by FY27 at a ~A$55m

cost-to-achieve). We expect significant items pretax of A$62m-68m for 2H26, which

excludes any AM goodwill and intangible impairment that remains a below-the-line risk

into the print. We note a WM-sale tax credit that materially lowers the reported FY26 ETR

without impacting UPBT, with tax on the accounting gain deferred to FY27.

• Wealth Management sale and deleveraging: The Bain Capital transaction remains on

track for 4QCY26 completion on the previously disclosed terms (A$500m upfront, up to

A$50m additional upfront, A$50m earn-out, ~A$30m post-tax transaction and

separation costs), subject to ACCC approval, ASIC AFSL variations and Court

processes. PPT has reduced gross debt by ~15% since Dec-25 and expects a net-debt-free

pro forma position post-completion. We do not yet embed sale proceeds or interest

savings in our forecasts.

• Stock view: We expect the lower AM FUM base and persistent outflows to constrain

FY27 earnings growth (FY27E EPS 155.3c, down 12% on FY26E), with CT growth and

cost-out only partly offsetting. We think consensus for FY27 (adjusted EPS ~178c) is

likely to be revised down on lower AM revenue, and we see a risk of downward revisions

in the future, absent flow stabilisation.