Jefferies upgrades Molten Ventures to 'buy'
Jefferies upgraded Molten Ventures - formerly Draper Esprit - to ‘buy’ from ‘hold’ on Thursday.
The bank said Molten’s update on Wednesday reiterating guidance for a year-end fair value uplift of 35% implies a 1,000p a share net asset value, up from 743p at the end of March last year.
"This is supported by a £76m uplift in FV of Molten Venture’s holding in one portfolio company announced today, which is equivalent to 50p/share on its own, or 19% of the expected uplift.
"This close to year-end, we adjust our FV forecast and change our rating to buy, cognizant that this is a 12-month view."
Jefferies said its view of the market's appetite to discount or pay a premium for Molten’s portfolio is that it tends to swing.
"Although the depths of the spring 2020 discount are still below the current point, the recovery was sharp. There has been rotation from growth to value, but continued revenue growth at portfolio companies demonstrates progress towards profitability, and there are clearly still buyers who will take GROW's portfolio companies on further.
"At such a steep discount to NAV, and with such a demonstration of confidence in value at a time of uncertainty, we go from holders to buyers."
Jefferies kept its price target at 1,000p.
At 1348 GMT, the shares were up 5.1% at 720p.