On Wednesday, Deutsche Bank adjusted its stance on EQT AB (ST:EQTAB) (EQT:SS) (OTC: EQBBF) stock, shifting from a Buy to a Hold rating, while maintaining a price target of SEK 345.00.
The bank's analysis suggests a positive medium-term outlook for private markets, which could benefit EQT due to its leading market positions. However, expectations are set for a lackluster second quarter, influenced by a challenging fundraising and deal environment.
The bank also notes the potential impact of share lock-ups expiring in October 2024, which could see up to 12.2% of EQT's shares released. This factor, combined with the firm's earnings outlook and its recent strong share price performance, contributed to the decision to downgrade the stock's rating. Despite the downgrade, Deutsche Bank sees a 9% upside potential to the stock, based on the current target price.
EQT AB, a prominent player in the private markets sector, has been recognized for its growth opportunities aligned with the positive medium-term forecast for the industry. The bank's outlook remains constructive on the sector's potential for expansion and the advantages that may accrile to well-positioned firms like EQT.
The analyst's commentary underscores the balance between EQT's favorable long-term prospects and the near-term headwinds it faces. While the forecast for the upcoming quarter is muted, the underlying growth narrative for private markets and EQT's strategic position within that space is acknowledged.
Deutsche Bank also highlighted its preference for CVC as the top pick among European alternative asset managers, without providing specific details on the rationale behind this preference. This comparison indicates a broader evaluation of the sector and its key players by the financial institution.
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