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Berenberg raises target price on Plus500 following \'a half of two quarters\'

By Iain Gilbert

Date: Friday 23 Aug 2019

Berenberg raises target price on Plus500 following \'a half of two quarters\'

(Sharecast News) - Analysts at Berenberg raised their target price on shares of financial services firm Plus500 from 770.0p to 800.0p on Friday following what it called \"a half of two quarters\".
While Plus500 generated net revenues of $148.0m and underlying earnings of $65.6m, Berenberg noted that within the results, the two quarters \"differed wildly\".

Berenberg, which reiterated its \'hold\' rating on the group\'s shares, said the first quarter was \"difficult\", with net revenues down by 65.0% quarter-on-quarter to only $54.0m, while earnings before interest, taxes, depreciation and amortisation was just $12.0m.

\"This was caused by global financial markets grinding up with relatively low volatility, which meant despite spread/fee income of $82.0m, this was offset by $28.0m in market losses,\" said Berenberg.

However, the German bank said the second quarter, particularly May and June, was \"a different story\" and much more profitable for Plus500.

\"Global markets were more volatile, so not only did spread and fee income increase by 14% quarter-on-quarter to $93m, but $1m of market gains increased net revenue to $94m. Likewise, EBITDA improved to $54m.\"

Berenberg revised its estimates on Plus500, projecting revenues of $107.0m and EBITDA of $61.0m per quarter in the second half, but warned: \"as always this is dependent on market conditions\".

Following the recent rally in its shares, Berenberg pointed out that Plus500 shares were trading at roughly 7.0 times\' EBITDA which left the firm fairly valued, in its view.


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