Learning Technologies stock retains Neutral; Citi cites decent return but tempered optimism

EditorAhmed Abdulazez Abdulkadir
Published 11/25/2024, 06:51 AM
ATG
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On Monday, Citi updated its outlook on Learning Technologies Group (LTG:LN) (OTC: LTTHF), increasing the price target to GBP1.00 from GBP0.75. The firm maintained a Neutral rating on the shares. The adjustment follows the extension of the "put up or shut up" (PUSU) deadline to the close of business on December 6, which keeps the potential acquisition by General Atlantic in play.

The due diligence process has been completed, yet it remains uncertain if this will affect the original offer price of 100 pence per share. LTG had previously indicated a willingness to recommend the offer at that level.

The analyst from Citi acknowledged the continued possibility of an acquisition, stating that a deal seems more likely than not. The revised price target reflects a potential estimated return (ETR) of approximately 13% from current levels. Despite the increase in the price target, the firm's outlook remains cautious, leading to the decision to not elevate the stock to a Buy rating. The updated forecasts take into account the first half's trading performance and the company's revised full-year guidance.

The ongoing discussions between Learning Technologies Group and private equity firm General Atlantic have been a point of focus for investors. The extension of the PUSU deadline suggests that negotiations are still active, providing additional time for both parties to potentially reach an agreement. The analyst's comments indicate that while a transaction appears probable, the financials do not yet justify a more bullish stance on the stock.

Learning Technologies Group has been advised by its financial analysts to anticipate a potential offer that aligns with the company's valuation as indicated by the original 100 pence per share price. The Citi analyst's remarks also hint at a cautious optimism regarding the likelihood of a deal being finalized, which would offer a modest upside to shareholders.

In summary, Citi's updated assessment of Learning Technologies Group reflects a modestly positive outlook, with a raised price target indicating an expected gain for investors should the acquisition proceed. However, the firm stops short of fully endorsing the stock with a Buy rating, suggesting that while the prospects of a deal are promising, the current financial projections and market conditions warrant a continued Neutral position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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