Story
Bridgepoint Shares Rise After Citi Upgrades Price Target on Kayne Acquisition
Summary
The private equity firm's stock gained as much as 5.4% after Citi analysts raised their price target by 20%, calling the recent acquisition of U.S. platform Kayne "strategically and financially attractive."
Shares of Bridgepoint Group PLC (LSE:BPT) surged on Monday after analysts at Citi raised their price target on the private equity firm, citing strategic and financial benefits from its recent acquisition of U.S. real estate investment platform Kayne.
Citi Lifts Price Target
In a note to clients, Citi increased its price target on Bridgepoint by 20%, moving it to 480 pence from a previous 400 pence. The bank stated that this new target represents a potential upside of approximately 60% from the stock's closing price on Friday.
In response to the positive analyst commentary, Bridgepoint shares climbed as much as 5.4% in early London trading. As of 9:50 a.m. local time, the stock was trading 4.8% higher at 314 pence.
AdAnalyst Rationale
The upgraded outlook is directly linked to the acquisition of Kayne. Citi analysts, led by Nicholas Herman, described the transaction as "strategically and financially attractive" and maintained their "Buy" rating on the shares.
The bank believes the deal will significantly benefit Bridgepoint by broadening its investment platform, improving the quality of its earnings, and accelerating its overall growth trajectory. Furthermore, the analysts noted that Bridgepoint's valuation appears compelling, describing it as "among the most discounted across global alts" despite what they termed the firm's "best-in-class growth."
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