The company has announced a $60m capital raising involving a $50m placement and $10m share purchase plan. The funds will be used for growth, investment in products and technology and to strengthen the balance sheet.
While supportive of the growth plans, Morgans notes the current capital raising significantly adds to the dilution that’s occurred throughout 2019 and needs to be justified by execution.
As the stock has re-rated strongly, the broker considers the valuation fair and retains a Hold rating. Target is reduced to $3.74 from $3.86.
Sector: Diversified Financials.
Target price is $3.74.Current Price is $3.70. Difference: $0.04 – (brackets indicate current price is over target). If Z1P meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).