Catapult Group has renewed and expanded its deal with Rugby Australia, in the wake of renewing its deal with the NRL, meaning no more material renewals upcoming in the near future.
The key to RA’s renewal was the technology, Morgans notes, not the price, suggesting R&D investment is paying dividends.
The broker now expects Catapult to achieve FY20 sales, earnings and cash flow targets, and has upgraded to Add from Hold in anticipation of outperformance ahead.
De-risking means the broker has also lowered its cost of capital assumption, leading to a target price increase to $2.19 from $1.56.
Sector: Technology Hardware & Equipment.
Target price is $2.19.Current Price is $1.83. Difference: $0.36 – (brackets indicate current price is over target). If CAT meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).