Iress (ASX: IRE) pushed marginally higher this morning after the financial technology company announced plans to expand its existing $100m on-market buyback of ordinary fully paid shares program until 28 July.
Within its update this morning, management advised that $70m in shares have been purchased through the program, but reminded investors there’s no certainty the full $100m will be deployed.
"The timing and actual number of shares purchased under the buy-back… will depend on the prevailing share price, market conditions, forecast future capital requirements and other considerations including any unforeseen circumstances," Iress noted.
The S&P/ASX200 company’s share price has fallen -6.45% over one year, but between 16 and 29 June rallied 16% seemingly on the back of nothing in particular.
Investors should note, given that it reduces the number of shares outstanding, a buyback is usually a positive for the share price.
The stock also made minor gains mid-April after reaffirming its $74-81m underlying net profit guidance and deciding not to divest its UK Mortgages business.
Management also upgraded its FY 2025 growth target (including mortgages) to net profit after tax (NPAT) of $120m to $135m, versus NPAT of $73.8m recorded in FY 2021.
Consensus on Iress is Hold.
Based on Morningstar’s value of $11.60 the stock appears to be fairly valued.
Based on the three brokers that cover Iress (as reported on by FN Arena) the stock is currently trading with -1.8% downside to the target price of $11.71.
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