Worldline: Invest Securities directly upgrades to buy
(CercleFinance.com) - Parisian broker Invest Securities has radically changed its mind about Worldline, an Atos subsidiary that is specialised in payment processing, and which has just announced a major acquisition.
Indeed, formerly sellers of the stock, analysts have directly upgraded it to buy, having increased their corresponding target price from 35 euros to 54 euros (+54%). They have also added it to their "IS Selection" best pick list.
Given competition from private equity funds, we feared that SIX will escape Worldline's grasp, analysts comment regarding the acquisition that the group recently announced, which is considered "structuring". Admittedly, the price paid is "very high," although this is "justified" insofar as it will enable the group's EBITDA margin to exceed - both in the medium and long term - 30%.
The structuring of the transaction (88% in shares/12% in cash) implies that Worldline will pay Equens' minority shareholders in cash, which adds enhances our 2019/2020 EPS estimate by over 10%, the broker's report adds.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Indeed, formerly sellers of the stock, analysts have directly upgraded it to buy, having increased their corresponding target price from 35 euros to 54 euros (+54%). They have also added it to their "IS Selection" best pick list.
Given competition from private equity funds, we feared that SIX will escape Worldline's grasp, analysts comment regarding the acquisition that the group recently announced, which is considered "structuring". Admittedly, the price paid is "very high," although this is "justified" insofar as it will enable the group's EBITDA margin to exceed - both in the medium and long term - 30%.
The structuring of the transaction (88% in shares/12% in cash) implies that Worldline will pay Equens' minority shareholders in cash, which adds enhances our 2019/2020 EPS estimate by over 10%, the broker's report adds.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.