Dolmen analyst Stuart Draper said yesterday that, as a result of the prospect of growth resuming in 2005, they are upgrading its 12-month share price target for IFG from €1 to €1.20.
Mr Draper told clients that IFG’s share price has risen by 28% since Dolmen’s last buy note on IFG on November 26 last.
In January, IFG chief executive Richard Hayes and chairman Joe Moran both purchased an additional 750,000 shares in IFG at a price of €0.90, bringing their total shareholding to 16.54% of the company.
NCB’s David Odlum said: “Going forward, earnings are set to improve as loss-making activities are reduced and management maximise profits from core activities. This coupled with continued balance sheet de-gearing makes IFG an excellent recovery story.”
Both Dolmen and NCB expect IFG to report impressive debt reduction in the 12 months to December.
“We are forecasting net debt of €38.5m as at 31st December 2004 (2003: €57.5m),” Mr Odlum said.
NCB and Dolmen are anticipating IFG to report earnings per share of 10 cent and 10.2 cent respectively, when the results are released next week.
Dolmen’s Mr Draper believes: “The consensus forecast is that IFG will generate earnings per share of 12c in 2005, representing strong growth on the likely flat result for 2004.
“If the market becomes comfortable next week that such earnings growth will resume in 2005, the shares could achieve another re-rating.”
Dolmen believe that IFG will report a good performance from its Irish business with mortgage volumes remaining strong.
“Irish Financial Services is set to report a 55% increase in profits, although the second half performance will be below the first half due to lower contributions from policy trading commissions and Title Insurance (both were flagged in the November trading update),” Mr Odlum added.
NCB expect the results to show good growth in the Irish and International businesses, with the British business still facing a number of challenges.