RBC Capital raises target price on JTC Group
Analysts at RBC Capital Markets raised their target price on fund management services provider JTC Group from 610.0p to 640.0p on Tuesday following some recent mergers and acquisitions.
The analysts adjusted their forecasts for JTC's RBC Cees deal, stating whilst there was "some uncertainty" from new business wins through Covid-19 and highlighted that the company still needs to deliver on the integration of recent M&A, they still continue to see the stock as "good value" given medium-term structural organic growth prospects and a "significant consolidation opportunity".
RBC added that it remained at 'outperform' on the stock, stating that there were few companies with the growth or returns profile of JTC, and as such, a premium rating was justified.
"With high levels of visibility, a balance sheet to support its acquisition strategy, and potential to improve margins from current levels (following a period of significant investment), we continue to be fans of the story," said RBC.
The Canadian bank also said JTC was "well-positioned" given its "unique ownership model" and jurisdictional reach.
"The stock performed well in 2020 (up 35%), and whilst there remains some risk of new business wins slowdowns as a result of Covid-19 and it needs to deliver on recent M&A integration, we continue to see risk-reward in favour given the medium-term growth opportunities," concluded RBC.