The market had been discounting its valuation of Vocus Group, UBS suggests, based on pessimism over the company’s ability to deliver on earnings forecasts and on under-valuation of its portfolio of assets. The August result and contract wins have countered the first point.
Yesterday Vocus announced its intention to IPO its NZ business to bolster the balance sheet and reinstate dividends. Tick box two. The broker has increased its target price to $4.40 from $3.60 but with the market already there, downgrades to Neutral from Buy.
Sector: Telecommunication Services.
Target price is $4.40.Current Price is $4.37. Difference: $0.03 – (brackets indicate current price is over target). If VOC meets the UBS target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
