Zip Co has announced a capital raising of up to $150m. Proceeds will be used for the US and UK expansion. UBS believes the company is now well situated for growth strategies in new markets and new products.
Although this is a relatively early-stage investment that is still making a loss, amid significant capital requirements, the broker is confident in management’s strategy. Rating is upgraded to Neutral from Sell, given the recent underperformance of the share price. Target is $5.70.
Sector: Diversified Financials.
Target price is $5.70.Current Price is $5.57. Difference: $0.13 – (brackets indicate current price is over target). If Z1P meets the UBS target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).