EDISON INVESTMENT RESEARCH LIMITED (LON:KEFI) Edison issues initiation on Altron (AEL): Rising star

Transparency directive : regulatory news

04/04/2024 12:17

Edison Investment Research Limited
Edison issues initiation on Altron (AEL): Rising star

04-Apr-2024 / 11:17 GMT/BST
The issuer is solely responsible for the content of this announcement.


London, UK, 4 April 2024


Edison issues initiation on Altron (AEL): Rising star

Altron is a South African-based provider of platforms and IT services, helping businesses transform and operate their IT. As part of the plan to refocus on strategic growth opportunities and to improve profitability, management has set ambitious medium-term profit targets. The group has made good progress to date, and we forecast a headline EPS CAGR of 21% from FY23 to FY26e. In our view, this performance is not yet reflected in the current share price. Full FY24 results in May should provide better clarity around individual business performance and we expect the discount to peers to reduce as positive margin progress becomes evident.

We have undertaken a sum-of-the-parts valuation to reflect the different dynamics across the group. After a 30% holding company/South Africa discount, we arrive at a valuation of ZAR21.0 per share, 84% above the current share price. A reverse DCF implies the current share price is factoring in only modest revenue growth and minimal margin growth from FY27. In our view, evidence of positive margin progress and clarity over the disposal of the two discontinued businesses should provide triggers for share price upside.

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About Edison: As a content-led investor-relations business, Edison helps companies stand out and meet the right shareholders. Edison’s integrated investor relations solution combines expert analyst content, digital targeting and active investor engagement. This drives liquidity and valuations by building bigger, better informed and more engaged investor audiences globally.

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For more information, please contact Edison:

Katherine Thompson +44 (0)20 3077 5700  tech@edisongroup.com

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End of Announcement - EQS News Service

1873511  04-Apr-2024 


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