LONDON (ShareCast) - (Sharecast News) - Shore Capital downgraded its recommendation on Amigo Holdings to \'hold\' from \'buy\' on Wednesday following the surprise departure of the company\'s chief executive and a recent rally in the share price.
The broker noted that the shares have rallied 57% since it upgraded them to \'buy\' on 25 March, largely closing the gap to its fair value of 270p, which does not currently include any explicit impact from potential regulatory change.

\"Taking this into account and the surprise departure of the group\'s CEO, we think now is a good time to revisit our stance,\" it said.

The downgrade comes after the company announced late on Tuesday that Glen Crawford was stepping down from his role as CEO this summer in order to seek medical treatment for a spinal condition.

\"This is clearly disappointing news for the group and, more importantly for Mr Crawford, who we wish well in his recuperation,\" ShoreCap said.

The broker also argued that Amigo is currently facing regulatory challenges following concerns raised by the FCA around the guarantor lending industry in March, which were again repeated in a speech by FCA chief executive Andrew Bailey on Tuesday.

\"The FCA\'s primary concern relates to what it perceives to be a rising number of payments being made by guarantors which may indicate that affordability is not being appropriately assessed by the industry, something that market leader Amigo has categorically denied.

\"The group has also seen significant negative commentary from the media in recent months, most notably through a series of articles published in the Times newspaper which question some of its historical business practices.\"

At 1350 BST, the shares were down 1.4% at 253p.

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