RE: On the Move2 Jan 2026 16:42
The Cavendish broker notes are not independent research and they are released on the same morning as the relevant RNS that they briefly talk about. So, the notes are worked on closely with RUA using embargoed numbers.
What to draw from that? First, I would say that whatever is published by Cavendish has the prior blessing of the RUA board so in a way reflects the company view of how the market should be valuing it. The notes are couched in broad and general terms so as not to depart too far from the information in the published RNS that prompted it. At the end, the broker publishes its target price. Can we infer that this is something the company and the broker debate and agree on?
What we know from the Cavendish notes is that, up to and including the 9/9/24 note on the ABISS acquisition, the target price was stated as 25p. Seven months later, on the 28/4/25 trading update for the 12 months ending March, the target price had been hiked to 50p.
Doesn’t sound especially scientific to me but maybe, given how the company could see developments and negotiations in the background coming on, they argued for this higher target as being reasonable.
It’s worth reminding ourselves that the Cavendish notes generally end with this statement:
“We believe the progress indicates RUA is a significantly de-risked, revenue-generating business with numerous growth opportunities, pointing to a valuation above the current market value. Further, the largely developed but strategically de-emphasised graft and valve products offer ‘free’ upside opportunities above the value of the core business.”
That last bit is what potentially excites the crowd and it’s not priced in. The market needs to see it happen, then the crowd will come running.
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