LONDON (ShareCast) - (Sharecast News) - Analysts at Berenberg lowered their target price on financial services company Close Brothers from 1,200.0p to 1,150.0p on Thursday but said the group was "closing issues and opening pipelines".
Berenberg said Close Brothers has confronted "cyclically lower" securities dealing revenues and slowing asset management growth during the past 18 months, alongside elevated costs from the closure of its litigation finance business.

However, the analysts said the "perfect storm" was now clearing, with residual risks from Novitas now "modest", following large provisions recognised in the first half.

The German bank also highlighted that it now expects Close Brothers' lending pipeline to enable an acceleration of loan growth to roughly 5% annually.

"Trading on 1.0x total book value, we, therefore, believe Close Brothers remains undervalued. Our 1,150.0p price target would value the company on 1.2x TBV and implies circa 30% upside to the current share price," said Berenberg, which reiterated its 'buy' rating on the stock.









Reporting by Iain Gilbert at Sharecast.com

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