McMillan Shares Remain Overvalued Despite Our Fair Value Estimate Increase

McMillan Shakespeare is a business services provider offering salary packaging, novated leasing, fleet management, and disability plan management. Together with Smartgroup, it dominates Australia’s salary packaging market and has a sizable presence in the novated leasing market. Entities in the government, healthcare, and not-for-profit industries make up the majority—more than 90%—of McMillan’s salary packaging client base. These industries are defensive and have favorable fringe benefits tax exemptions. They are regular users of McMillan’s services, and underpin the firm's steady revenue.