Citi downgrades Bridgepoint to 'neutral'

30th Oct 2024 08:39

(Sharecast News) - Citi downgraded its stance on alternative asset fund management group Bridgepoint on Wednesday to 'neutral' as it said there are limited near-term catalysts and the shares are up 80% over the past year.

The bank said it was constructive on Bridgepoint's medium-term growth prospects and sees notable upside to consensus earnings from FY26E.

However, a lack of near-term growth and/or catalysts and a need to demonstrate cost control and raising SMAs mean it sees less pressing need for investors to buy the shares.

"The recent decisions to stop the SBB (following rerating) and sell previously locked-up shares at an 11% discount within a relatively short period were also weak signals, in our view," Citi said.

"After the capital markets day we increase our target price to £3.50 but downgrade rating to neutral."

Citi said it believes the shares could become more attractive as we progress through the next fundraising cycle and approach BE VIII activation, which is expected mid-FY26.

At 0850 GMT, the shares were down 1.8% at 320p.