RBC Capital starts 3i Group at ‘outperform’
RBC Capital Markets initiated coverage of private equity firm 3i Group on Wednesday with an ‘outperform’ rating and 2,550p price target.
It noted that 3i has a healthy track record on total shareholder return, with a compound annual growth rate of 18% over the last 10 years.
"A significant proportion of this has been driven by Action, and we don't foresee a change near-term," RBC said.
"We expect growth in the discount segment plus a strong and proven store expansion strategy to drive multi-year growth for Action.
"We still see good value in 3i at current levels, given its growth and strong balance sheet, differentiated long-term strategy and defensive asset allocation. Hence, we initiate at outperform."
At 0920 GMT, 3i shares were up 1.6% at 2,293p.