3i Group (III)

Sector:

Financials

Index:

FTSE 100

2,809.00p
   
  • Change Today:
      7.00p
  • 52 Week High: 2,826.00
  • 52 Week Low: 1,658.50
  • Currency: UK Pounds
  • Shares Issued: 973.37m
  • Volume: 1,480,614
  • Market Cap: £27,342m
  • RiskGrade: 122

Morgan Stanley hikes target for 3i, says portfolio undervalued

By Alexander Bueso

Date: Wednesday 29 Jan 2020

LONDON (ShareCast) - (Sharecast News) - Analysts at Morgan Stanley hiked their target price for shares of private equity and infrastructure investor 3i from 950.0p to 1,300.0p after taking a fresh look at its major assets, especially in retail.
They also upgraded their recommendation for the stock from 'equalweight' to 'overweight'.

Having conducted a discounted cash-flow analysis of Action, Europe's largest non-food discount retailer, they estimated that 3i's stake was worth 469.0p, or 82.0p more than the net asset value estimated by 3i itself using a multiple-based approach.

High-teens growth in Action's earnings before interest, taxes, depreciation and amortisation would also support double-digit earnings growth at the group level for 3i, they said.

And excluding Action, a sector valuation suggested that the 11.0 times EBITDA multiple used by 3i was "conservative", with valuation supported by 3i's healthcare assets, not least given the 25.0-50.0% premiums that strategic buyers typically pay.

As well, the investor's 13.0% implied cost of equity, versus 9.0% for peers, more than covered the extra risk from its balance-sheet driven business models, versus peers who used third party funds resulting from the "potential for greater volatility in a downturn", Morgan Stanley explained.

Furthermore, added the analysts: "Non-cyclical exposures, unlevered group balance sheet and healthy distribution provide downside protection."

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

3i Market Data

Currency UK Pounds
Share Price 2,809.00p
Change Today 7.00p
% Change 0.25 %
52 Week High 2,826.00
52 Week Low 1,658.50
Volume 1,480,614
Shares Issued 973.37m
Market Cap £27,342m
RiskGrade 122

3i Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
20.5% below the market average20.5% below the market average20.5% below the market average20.5% below the market average20.5% below the market average
39.05% below the sector average39.05% below the sector average39.05% below the sector average39.05% below the sector average39.05% below the sector average
Price Trend
96.23% above the market average96.23% above the market average96.23% above the market average96.23% above the market average96.23% above the market average
96.55% above the sector average96.55% above the sector average96.55% above the sector average96.55% above the sector average96.55% above the sector average
Income
13.49% below the market average13.49% below the market average13.49% below the market average13.49% below the market average13.49% below the market average
45.45% below the sector average45.45% below the sector average45.45% below the sector average45.45% below the sector average45.45% below the sector average
Growth
79.59% above the market average79.59% above the market average79.59% above the market average79.59% above the market average79.59% above the market average
87.04% above the sector average87.04% above the sector average87.04% above the sector average87.04% above the sector average87.04% above the sector average

What The Brokers Say

Strong Buy 3
Buy 6
Neutral 2
Sell 0
Strong Sell 0
Total 11
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

3i Dividends

  Latest Previous
  Interim Final
Ex-Div 30-Nov-23 22-Jun-23
Paid 12-Jan-24 28-Jul-23
Amount 26.50p 29.75p

Trades for 28-Mar-2024

Time Volume / Share Price
16:35 1,194,586 @ 2,809.00p
16:35 152 @ 2,809.00p
16:35 56 @ 2,809.00p
16:35 328 @ 2,809.00p
16:35 646 @ 2,809.00p

3i Key Personnel

CEO Simon Borrows

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