Citigroup downgrades Colt to 'neutral' on valuation
Citigroup downgraded Colt to ‘neutral’ from ‘buy’ following a share price increase of around 27% over the last month, which means the stock is now trading an optimum level.
COLT Group SA
189.75p
16:34 09/09/15
Fixed Line Telecommunications
1,763.66
12:59 19/04/24
FTSE 250
19,304.60
13:05 19/04/24
FTSE 350
4,309.10
13:05 19/04/24
FTSE All-Share
4,265.33
13:05 19/04/24
The bank raised Colt’s target to 190p from 175p, in line with the offer from Fidelity, which has made a 190p per share cash offer for the shares in the company it does not already own.
Still, Citi said Colt’s plan to overhaul the business by exiting from IT services to focus on Network, Voice and Data Centre is a positive move.
“We are confident on the company's long-term earnings growth outlook, given management's focus on managed services,” said Citi.
Risks that could impede the share price from reaching the bank’s target include intensifying competition and further deterioration in European economic conditions.
Upside risks include a better-than-expected pricing environment, value-accretive acquisitions and a raised offer from Fidelity.
At 08:20, shares were down 0.8% at 187.50p.