Broker tips: CVS Group, Impax Asset Management
By Iain Gilbert
Date: Friday 08 Oct 2021
(Sharecast News) - Analysts at RBC Capital Markets has raised their target price on veterinary services provider CVS Group from 2,750.0p to 3,100.0p.
RBC said on Thursday that the primary reason for its price target revision was its assertion that the Competition and Markets Authority was likely to rule in the firm's favour in regards to its recent acquisition of Quality Pet Care.
The Canadian bank, which has an 'outperform' raring on the stock, stated it had researched historical CMA actions to address two key investor concerns - what could be the outcome and impact on CVS from the recent CMA investigation, and what were the wider ramifications of this investigation with respect to ongoing consolidation of the UK vet market.
"Our proprietary analysis suggests that, at worst, there will be minimal impact for CVS, with divestment of one site. Our work also suggests there is further scope for consolidation in the UK vet market," said the analysts, who added that the fall in share price on the CMA news was "an over-reaction".
Analysts at Berenberg raised their target price on asset manager Impax Asset Management from 1,360.0p to 1,400.0p, stating the firm had grown through "the slow summer".
Impax posted total assets under management growth of roughly 8% quarter-on-quarter to £37.2bn in the three months ended 30 September, roughly 3% ahead of Berenberg's £36.0bn estimate.
The German bank's stated most of Impax's expansion was a result of positive inflows of around £1.5bn, representing an annualised net organic growth rate of about 17%.
"While this level of organic growth represents a slowdown versus Q3, it is in line with the normal seasonality of slower flows during the summer months," said Berenberg.
The analysts also noted that Impax reported positive investment performance of approximately £1.2bn over the period, representing a quarterly return of 3.5%, better than the FTSE All-Share Index at 1.1% over the same period.
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