Citi believes Fineos Corp’s equity raise of $60m, with an additional $5m share purchase plan (SPP), removes an overhang on the stock and is in line with the broker’s view that the company required growth capital.
The broker notes the size of the raise also provides Fineos with the flexibility to invest in its product and integrate Limelight and Spraoi into its platform, while at the same time pursuing bolt-on acquisitions.
Target is lowered to $5.22 from $5.25 and the Buy is retained.
Sector: Software & Services.
Target price is $5.22.Current Price is $4.53. Difference: $0.69 – (brackets indicate current price is over target). If FCL meets the Citi target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
