On the face of it, Discovery’s results should have helped to keep its buoyant share price afloat. After all, normalised headline earnings growth of 16% in an SA hit by recession is commendable. But the market isn’t buying it. Of the analysts who formally cover Discovery as tracked by Bloomberg, there is rarely such wide dissent on what a company should be worth. In the case of Renaissance Capital, its target price on the share is R91 – implying a correction of as much as 45%. Avior, however, which rates the share an "outperform", has a 12-month target price of R258.74 – a potential gain of 54% from its present levels. Perhaps one of the issues for sceptics is that Discovery’s biggest profit generators are still almost entirely South African, and that the company’s expansion abroad is still mainly funded by its operations at home. Its "emerging businesses" have turned profitable, making R158m in the year to June from a R170m loss in 2017. But how sustainable Discovery’s rand earnings...

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