Goldman Sachs initiates coverage of Avast at 'buy'

The bank said the consumer-facing software firm was set to benefit from increasing work from home trends "in a heightened cyber risk environment".

"With a geographically diversified user based of 435m+, we believe the market under-appreciates Avast’s opportunity for earnings growth, further augmented by upselling/cross-selling product adjacencies, such as privacy and Internet of Things, which we expect to drive a 7% revenue compound annual growth rate and a 10% free cash flow CAGR for Avast.

"We therefore see an attractive opportunity ahead of the first half results on 12 August, and in listed the stock at ‘buy’ with a 12-month price target of 600p, offering 21% upside."

Avast, which debuted on the London market two years ago, joined the FTSE 100 earlier this month. Last year it reported full-year earnings before interest and tax of $460m on revenues of $873m. Goldman Sachs is forecasting 2020 revenues of $897m and EBIT of $473m.

As at 1445 BST, shares in Avast were ahead 3% at 523.50p