BMO Raises Price Target On Markit Following Investor Meetings

Loading...
Loading...
BMO reiterated its Outperform rating and raised its price target by $2 to $43 on
Markit LtdINFO
after the management meetings suggested that the company could achieve its merger synergies earlier than expected.

"While management reiterated its prior targets of $125 million in annualized cost savings and $100 million in annualized revenue synergies by F2019, we believe the slope of reaching these targets could occur earlier than expected," analyst Jeffrey Silber wrote in a note.

Notably, the company has already begun to generate small revenue synergies in just the few weeks as a combined entity.

Silber said management repeated its long-term targets of mid-single-digit revenue growth and low to mid 40 percent EBITDA margins. In addition, it was "adamant" about hitting its F2017 adjusted EPS goal of 20 percent growth (about $2.08) and mid-teens growth thereafter.

"We believe the combined company is much better protected in the next economic downturn, as the major end-markets — financial services, automotive and energy — may have their own cycles and we likely have already been through the energy downturn," Silber added.

For 2016, Silber projects EPS of $1.75 on revenue of $2.754 billion, and 2017 EPS of $2.05 on revenue of $3.611 billion.

At time of writing, shares of Markit were up 0.85 percent on the day, trading at $36.87. The revised target of $43 implies a potential upside of about 18 percent over Thursday's close.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
Loading...
Loading...
Posted In: Analyst ColorLong IdeasPrice TargetReiterationM&AAnalyst RatingsTechTrading IdeasBMOIHS MarkitJeffrey Silber
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...