Broker tips: AJ Bell, Corero Network Security

The analysts of Berenberg reduced their target price on the online investment platform operator A.Bell from 400.0p to 300.0p on Tuesday, citing a negative mark-to-market.

Berenberg said AJ Bell had “steady” organic net inflows of £1.5bn in the three months to March 31, representing an annualized organic growth rate of around 7.9% .

Although analysts also pointed out that total assets under administration fell by 2% to £74.1 billion due to negative market movements caused by the invasion of Ukraine, they still considered the recovery of organic growth over the first quarter as favorable, given the “significantly higher levels” of uncertainty in the first quarter of the year.

The German bank also said that AJ Bell had a negative investment performance of around £3.0 billion over the period, representing a decline of around 4.0%, worse than the decline of around 3% of the MSCI PIMFA balanced index over the same period. Markets continued to decline and are now down another 2% in April, meaning further downgrades are ahead, analysts added.

“While we believe the organic growth numbers are supportive of the long-term investment scenario, we have reduced our estimates by 6-13% due to lower market levels,” said Berenberg, who has reiterated his “hold” note on the title. .

The analysts of Canaccord Genuity slightly raised their price target on the security systems company Corero Network Security from 12:00 a.m. to 10:00 p.m. Tuesday, saying the “undervalued” stock represented a “profitable cybersec growth story.”

Canaccord Genuity said Corero’s January trading update suggested “strong margin improvement” in the second half of 2021 and added that today’s 2021 results highlighted early earnings, with earnings below adjusted underlying of $3.2 million and an organic revenue increase of 24% over a strong 2020 comparison.

The Canadian bank, which maintained its ‘buy’ rating on the stock, said Corero’s profitability metrics benefited from a ‘richer mix’, with continued growth in software-only sales boosting margins gross at 85% during the year.

While operating expenses were flat overall, analysts expect recent investments in sales, marketing, and partner channels in future growth to increase that from here.

Canaccord said the demand environment remained “favorable” as the frequency, complexity and severity of DDoS attacks continue to increase and cybersecurity was elevated to a board-level priority.

“In addition, our analysis shows growing regulatory pressure in Corero end markets to strengthen cyber defenses. , we expect similar trends with our estimates implying that sales growth will accelerate to more than 30% year-over-year,” the analysts said.

“Management continues to execute on its strategic objectives with ‘self-sufficiency’ now achieved, a significant milestone. Small-cap investors wanting exposure to a fast-growing cybersecurity game can buy at an attractive price of 2.1x EV/Sales, a ~65% discount to listed peers.”

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