Berenberg ups target price on Integrafin

Berenberg said Integrafin's H124 report detailed a "solid" performance, with results coming in ahead of consensus pre-tax profit expectations, primarily due to higher-than-expected interest income and lower-than-expected costs.

The German bank highlighted that the investment platform sector was characterised by long-term growth trends and noted that UK platform assets had grown at a roughly 11% compound annual growth rate between 2012 and 2023.

Berenberg, which reiterated its 'buy' rating on the stock, also noted that Integrafin has also steadily taken market share and that it believes the business should be able to deliver consistent earnings growth in the future.

"Given their attractive growth and margin characteristics, pureplay investment platforms typically trade at high valuation multiples. Integrafin is no exception to this and traded at an average of c30x P/E up until 2022. However, over the past couple of years, platforms have de-rated, with cost-of-living pressures a headwind to growth in the sector," said Berenberg.

"We believe that the current price (Integrafin trades on c22x forward EPS) offers a good opportunity to buy into a business that should be able to generate consistent earnings growth and potentially also re-rate as market sentiment improves."

Reporting by Iain Gilbert at Sharecast.com