Z1P – Morgans rates the stock as Add

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Following a disappointing 1H result, Morgans makes significant downgrades to FY22 and FY23 EPS estimates of more than -50% and lowers its target price to $3.94 from $7.54. The acquisition of Sezzle ((SZL)) and capital raise is also factored-in.

The broker sees the logic for revenue synergies in the acquisition. However, its thought the market may be low on trust after the 1H result and now that the date for becoming earnings (EBTDA) positive has been pushed out by the acquisition until FY24.

In conjuction with the scrip deal (valuing Sezzle at $491m), a $149m institutional placement and $50m share purchase plan at $1.90 per share has been launched.

Sector: Diversified Financials.


Target price is $3.94.Current Price is $2.21. Difference: $1.73 – (brackets indicate current price is over target). If Z1P meets the Morgans target it will return approximately 44% (excluding dividends, fees and charges – negative figures indicate an expected loss).




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