Liberum lowers target price on Non-Standard Finance

Liberum said despite an uncertain short-term outlook due to the Covid-19 pandemic, its analysis suggested that cash generated by the group in the 2020 trading year eliminated any risks around Non-Standard's solvency.

However, Liberum noted that its base case assumed limited loan book growth relative to 2019 levels, a combination of upgrading its book and self-help measures should enable a sharp recovery in profitability by 2022.

"With the shares trading on just 1.9x these earnings, it is clear that the group's liquidity position is misunderstood, the strength of its brands and market positioning is under-appreciated.

All in all, Liberum said it's 'buy' rating on the firm was based on its base-case assumptions, with additional upside likely if Non-Standard moves to raise further equity.