In today’s briefing:
- Thoughts About the Failed Offer for Allfunds
- [JD.com (JD US) Target Price Change]: Painful Transition Weighs on Both Topline and Margin
- Digital Turbine Inc.: Major Drivers
- Fidelity National Information Services Inc.: Major Drivers
- SS&C Technologies Holdings Inc.: Major Drivers
Thoughts About the Failed Offer for Allfunds
- As per the failed offer terms, consideration would amount to €5,507 million, of which €3,581 million in cash, which would stretch the balance sheet of Euronext.
- Euronext should issue equity to fund part of the cash component, but the EPS accretion in a base case scenario would be just 4.5% (see sensitivity analysis premia/ENX share price).
- If any exchange operators were truly interested in acquiring Allfunds, I find it surprising that they would not had acquired shares during some share placements in October 2022.
[JD.com (JD US) Target Price Change]: Painful Transition Weighs on Both Topline and Margin
- In C4Q22, JD reported in-line total revenue and beat in profit. We trimmed down our forecast on C1Q23 total revenue by 4% due to slower-than-expected rebound in retail spending.
- JD is shifting its strategy to be more focused on low price and user, and we suggest that the repositioning period could be painful for the company.
- We cut our revenue forecast by 5%. Our estimates on top and bottom lines in 2023 are (6%) and (28%) below cons. Maintain SELL rating and cut TP to US$27.
Digital Turbine Inc.: Major Drivers
- Digital Turbine’s Q3 results were a major disappointment as the company failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
- In the quarter, revenue decreased by 25% from the prior year to $162.3 million which was unexpected.
- Regarding ad placement kinds, the company has kept a portfolio that is evenly distributed among banner, interstitial, and video ads.
Fidelity National Information Services Inc.: Major Drivers
- Fidelity National Information Services achieved its financial targets for the fourth quarter and delivered an all-around beat.
- In the fourth quarter, merchants increased by 2% on a constant currency basis.
- We give Fidelity National Information Services a ‘Buy’ rating with a revised target price.
SS&C Technologies Holdings Inc.: Major Drivers
- SS&C delivered a decent result in the last quarter of 2022 despite a challenging operating environment for SS&C Technologies.
- Adjusted organic revenue was flat in line.
- In the quarter, SS&C Technologies acquired a specialized Colorado-based fund administrator, Complete Financial Ops, that focuses on private equity as well as family offices.
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