By Michele Maatouk
Date: Friday 11 Sep 2020
LONDON (ShareCast) - (Sharecast News) - Citi initiated coverage on shares of security software vendor Avast on Friday with a 'neutral' recommendation.
The bank said that while the current business has attractive growth prospects, its analysis suggests the share price fully reflects the continued evolution of the group at its current trajectory.
"Although M&A could provide further upside we do not feel it appropriate to reflect this in our current target price of 550p per share," Citi said.
The bank said that as net debt/EBITDA levels approach management's target floor of 1.5x, speculation naturally rises regarding future capital deployments.
"The potential war chest could be used to add 10-15% to 2021 earnings...but don't pay for it too much in advance," it said.
"This M&A speculation has left little room for further upside and implies that a significant proportion of short-term earnings enhancement from future corporate actions is already in the current share price."
|52 Week High||600.00p|
|52 Week Low||420.00p|
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