Broker finnCap has initiated coverage of Tekcapital PLC (LON:TEK) and has set an initial price target of 19p based on its valuation versus its peer group.
The investment firm, which focuses on developing intellectual property (IP) from university technologies, recently raised US$1.1mln through a share placing to fund the commercialisation of its portfolio.
READ: Tekcapital raises US$1.1mln in placing while portfolio company appoints chairman
“At present, the stock sits at a 57% price to book discount to the average of its direct peer group, and applying that average to the company’s net asset value (NAV) implies a target price of 19p and potential share price upside of 124%,” finnCap analysts said in a note to clients.
The broker said it believed Tekcapital’s nine portfolio companies have been conservatively valued on its balance sheet and that three of the companies showed “significant commercial potential” in very large, addressable markets.
Shares in the company currently stand at around 8p and sit at a 50% discount to its NAV compared with the directly quoted peer group average premium of 16%.