‘Bulge bracket’ investment bank Citi has hiked its price target and repeated its ‘buy’ recommendation for video games services specialist Keywords Studios PLC (LON:KWS).
On Tuesday, AIM-listed Keywords, which is valued at £1.2bn, reported a surge in half-year revenue and adjusted profits.
READ: Keywords hits the acquisition trail again
The company also unveiled its latest acquisition, this time of renowned Hollywood sound designer, Scott Gershin and his Sound Lab team.
Closer to home, it also announced the purchase of Brighton-based trailers maker The TrailerFarm. The two acquisitions mean Keywords has been 11 so far in 2018.
Citi analysts moved their price target up to £21.50, citing “higher acquisition assumption”.
WATCH: Keywords boss on excellent first-half
They said: “We increase our annual revenue contribution from acquisitions to €35mln, which results in an increase to our acquisition upside valuation to £5.65.
“This compares to an average of c.€40m since listing in FY14 and is in line with the mid-point guidance range for bolt on acquisitions, excluding any larger transactions.”
Citi also noted the expansion of the workforce – Keywords has recently added 660 new workstations – as a “lead indicator of growth momentum”.
Keywords shares were down 0.6% to 1,882p early on Wednesday afternoon.