logo-loader
viewMicro Focus International plc

Micro Focus boosted by Goldman Sachs upgrade to ‘buy’ from ‘neutral’ following recent trading update

The US investment bank's analysts said: “An in-line FY18 trading update suggests that revenue declines are moderating and sell-side estimates have likely bottomed”

Micro Focus office
Goldman Sachs also raised its 12-month target price for Micros Focus to 1,700p, up from 1,300p previously

Goldman Sachs gave a lift to blue-chip software firm Micro Focus International PLC (LON:MCRO) on Wednesday, upgrading its rating to ‘buy’ from ‘neutral’ following the group’s recent trading update.

The US investment bank also raised its 12-month target price to 1,700p, up from 1,300p previously, with Micro Focus shares trading at 1,427.50p in mid-afternoon trading, up 9.2% on Tuesday’s closing price.

READ: Micro Focus raises revenue guidance for year just ended

In a note to clients, Goldman’s analysts said: “Following a period of significant M&A execution issues which led to turbulent sales growth in FY18, we believe that the dust is starting to settle at Micro Focus.”

They added: “An in-line FY18 trading update suggests that revenue declines are moderating and sell-side estimates have likely bottomed.”

The analysts concluded: “In our view, cost synergies from the integration of HPE Software, and ongoing and future capital returns, should come to  the fore with the stock trading at a near term trough multiple of 7.5x 2019E PF EPS and revenue declines not deteriorating further.”

Quick facts: Micro Focus International plc

Price: 1102.8 GBX

LSE:MCRO
Market: LSE
Market Cap: £3.68 billion
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Summit Therapeutics' Glyn Edwards talks US$50mln backing and ridinilazole...

Summit Therapeutics PLC's (LON:SUMM, NASDAQ:SMMT) CEO Glyn Edwards sat down with Proactive London's Andrew Scott following the news of a US$50mln funding deal with biotech billionaire Bob Duggan. The investment will help get the company’s next-generation antibiotic through phase III clinical...

8 hours, 32 minutes ago

RNS

Total Voting Rights

1 week, 1 day ago

Notification of major holdings

1 week, 5 days ago

Trading update

2 weeks, 6 days ago

Director Declaration

3 weeks, 1 day ago

Total Voting Rights

on 1/11/19

2 min read