A: Thanks for the question.

I am a bit of a loss to understand why Challenger (CGF) has fallen so hard.

The market has become a little concerned about margin pressure, and sale of new annuities. The latter reflects a decline in business originating in Japan (where Challenger sells Australian dollar denominated 20 year fixed rate annuities), due in part to US bond yields now being higher than Australian bond yields. This all said, Challenger has re-affirmed guidance.

According to FN Arena, the consensus broker target price is $11.74. Of the major brokers, there is 1 buy, 5 neutral and 2 sell recommendations. Target prices range from $9.70 from Ord Minnett to a high of $13.20 with Credit Suisse.

I suppose I would be a cautious buyer.

Regards