Shore Capital upgrades Transact owner IntegraFin to 'buy'

(Sharecast News) - Shore Capital upgraded IntegraFin to 'buy' from 'hold' on Tuesday and lifted the price target to 400p from 350p as it said the Transact owner is "an excellent business, properly undervalued".

"We all know that UK fund outflows have left some quality businesses looking like unloved flotsam on the market tides, but is there a better example than this?" it said.

"IntegraFin is a 51% profit before tax margin platform business, with 10% market share but whose brand, proprietary technology and customer service is now winning a 25% share of net flows, trading on less than 14x Y2 despite earnings compounding at 19% '25-27F," the broker said.

Shore Capital said its numbers are above consensus because of the market moves since the first-half results.

It argued that IntegraFin is a key beneficiary of new technologies, since IFAs (independent financial advisers) should be able to serve more clients and consequently more assets as some workflows are automated.

It also noted: "IHP builds its own technology, with increasing straight through processing and nimbleness that its competitors, who largely rely on FNZ/ GBST third-party technology, cannot match."

At 1330 BST, the shares were up 5% at 354.50p.