This report is an updated version of the report published on 8 July 2025 at 2:45 PM AEST.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle Investment Management Group Limited (ASX: PNI) is an Australian-based multi-affiliate investment management company headquartered in Sydney. The company focuses on cultivating a diverse family of investment management firms, known as Affiliates, in which it holds significant minority equity interests. 

Recommendation Rationale – SELL at AUD 20.92

• Likely to Face Resistance: PNI is trading around R1 level recommended on 23 June 2025, and it can face resistance as broad market weakness puts pressure on stocks.
• Macroeconomic and Geopolitical Uncertainty: The market retreat was partly driven by renewed US trade tensions, with President Donald Trump ruling out tariff extensions and imposing new penalties on imports from key trading partners, including a 50% tariff on copper and potential 200% duties on pharmaceuticals. Such trade actions increase global economic uncertainty, which can dampen investor appetite for growth and investment management stocks like Pinnacle.
• Rising Staff Costs: Staff costs within Pinnacle parent increased by 14% (AU$2.7 million) PCP in H1 FY25, driven by additional headcount and higher remuneration including provisions for short-term incentives.
• Limited Improvement in Equity Appetite: Despite market support, Pinnacle notes that institutional appetite for equities remained constrained in H1 FY25, with flows dominated by fixed income, credit, and private market assets. This limits growth potential in key equity strategies.

PNI Daily Chart

 (Source: REFINTIV; Analysis by Kalkine Group)

Valuation Methodology: Price/Cash Flow Value Approach (FY Jun'26E) (Illustrative)

The stock might trade at a slight premium to its peers, considering the 5-year (five years to 31 December 2024) NPAT CAGR of 40.6%, and 140% YoY growth in Diluted EPS in H1 FY25. For conducting the valuation, the following peers have been considered: Hub24 Ltd (ASX: HUB), EQT Holdings Ltd (ASX: EQT), and Qualitas Ltd (ASX: QAL).

Given its current trading levels, recent rally in the share price, and risks associated, it is prudent to sell the stock at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 20.92, as of 8 July 2025 at 1:50 PM AEST.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 8 July 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.