Magellan rallied 12% on Wednesday after finalising its merger with Barrenjoey, completing its evolution into a diversified financial services business. The combined group, as subscribers know, will eventually rebrand as Barrenjoey Group, with David Gonski appointed Chairman and Brian Benari taking over as CEO. The reaction to the news was surprising, as it was always coming, but it was a very strong session for the sector, with Perpetual leading the line, and Netwealth (+7.7%) not too far behind.
MM discussed the merger in detail last month here; at the time, we said MFG had a stronger future under Barrenjoey, and we added MFG to the Income Portfolio Hitlist; at this stage we wish we’d just bought it with the stock trading ~14% higher.
- We can see MFG initially testing its 2025 high through 2026/7 but the risk/reward isn’t as appealing with the stock back above $10.
MM is cautiously bullish towards MFG below $11
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