Credit Suisse starts Equiniti at outperform

Equiniti was “far more” than a registrar and could look forward to profitable growth, a top broker said at the start of the week.

It was a leader in growth markets, with the potential addressable market forecast to grow at a compound annual growth rate of 6% over 2014-19, Credit Suisse said in a research report sent to clients.

The company could cross-sell to existing B2B clients and expand its service line both organically and via mergers and acquisitions.

Furthermore, its on-going expansion into B2C activities such as retail share dealing constituted “multi-faceted growth opportunities, underpinned by inflation escalation clauses embedded in around two-thirds of the group's contracts,” analysts Karl Green, Andy Grobler and Myfanwy Parratt said.

Equinity had also invested heavily in proprietary technology assets which were highly flexible and scalable.

Together with its move towards offshoring operations staff, that should provide the foundation for profitable growth, the analyst said.

Green and his team initiated coverage of the stock with an ‘outperform’ recommendation and a target price of 210p.