2224 GMT [Dow Jones] Canaccord Genuity upgrades RXP Services Ltd. (RXP.AU) to buy from
speculative buy, and lifts its price target by 25% to 75 Australian cents/share (55
cents/share), after the Australian professional services company bought Engage Viidacom
for an upfront A$6 million ($4.4 million). The broker also hikes its FY15 and FY16
forecasts by 13% and 14%, respectively, following the deal. "We view RXP as
fundamentally cheap and expect the stock to outperform its benchmark peers in the medium
term," says analyst Owen Humphries. "RXP trades at a 60% discount to its sector
peers, and we expect further outperformance as the stock undergoes a PER re-rate and
potential positive earnings revisions throughout FY16." RXP last traded at A$0.48.
([email protected]; @dwinningWSJ)
RXP Price at posting:
50.0¢ Sentiment: None Disclosure: Not Held
