BofA downgrades Bridgepoint stock, says growth priced in after 50% rally
On Thursday, BofA Securities issued a rating change for Bridgepoint Group PLC (BPT:LN), downgrading the stock from Buy to Neutral. The firm has maintained its price target for Bridgepoint at 340 pence (GBP3.40), suggesting that the recent rally in the stock price has now aligned with the company’s growth prospects.
The analyst at BofA Securities noted that Bridgepoint’s shares have experienced a significant rally, surging over 50% since their low in June, which has narrowed the gap in performance compared to its peers that was evident in the first half of 2024. With the stock now trading at 19 times earnings and at a discount of more than 20% to its larger European competitors, the analyst believes the risks are now evenly balanced.
The unchanged price target of GBP3.40 comes after a review of earnings per share (EPS) forecasts for the years 2024 to 2026. This review took into account various factors including the timing of the Business Development Company V, foreign exchange impacts, and the suspension of the share buyback program.
While the price target remains steady, the analyst pointed out that Bridgepoint’s earnings could surpass expectations if the company exceeds its fundraising goals. Additionally, the potential for mergers and acquisitions (M&A) could further enhance the company’s multiples and earnings. However, the exact timing and likelihood of such activities are not certain.
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