Canaccord Genuity raises target price on Duke Royalty

(Sharecast News) - Analysts at Canaccord Genuity raised their target price on finance company Duke Royalty from 45.0p to 52.0p on Thursday following the firm's "resilient" full-year trading performance.
Canaccord, which also reiterated its 'buy' rating on the stock, stated that in the 12 months ended 31 March, Duke had delivered cash revenue of £11.0m, up 7% year-on-year despite the impact of the Covid-19 pandemic, almost exactly in line with its forecasts.

The Canadian bank said Duke's investment portfolio experienced £9.9m of net fair value gains in the period, well ahead of its forecast of £2.2m, which reflected a partial reversal of the £15.6m net fair value and impairment write-downs taken a year prior as a result of the pandemic.

"The net FV uplift is reflective of an improving outlook and resumption of full payments for the majority of royalty partners which were in forbearance," said Canaccord.

Canaccord added that so far in 2022, Duke had deployed around £23.0m to three new royalty partners, including the company's first transaction in North America.

"We forecast cash revenue to grow by 19% in FY22 and 54% in FY23. We are pleased to see the execution of the strategy outlined concurrent with the equity capital raise conducted in April and expect to see further growth in the book over the coming months," said the analysts.