Shares in Micro Focus (LON:MCRO) have fallen deep into the red as Credit Suisse lowered its rating on the stock. Proactive Investors quoted the analysts as pointing to the tech company’s ‘poor interim results update’ earlier this month.
As of 13:26 BST Micro Focus’ share price had given up 4.46 percent to 1,221.50p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.92 percent in the red at 7,591.27 points. The group’s shares have lost more than 41 percent of their value over the past year, as compared with about a 2.8-percent gain in the Footsie.
Credit Suisse trims stance on Micro Focus
Credit Suisse lowered its rating on Micro Focus from ‘neutral’ to ‘underperform’ today following the group’s latest results when the company disclosed that it was running about a year behind its original plan for the integration of the HPE Software assets. The group further reported an eight-percent dip in half-year pro-forma constant currency revenue.
“Management delivered a poor interim results update, offering limited comfort on the medium-term future,” the analysts pointed out, as quoted by Proactive Investors, adding that they thought that created ‘a difficult equity story’. The broker further argues that it increasingly wondered whether Micro Focus was better suited to a private equity environment.
Other analysts on blue-chip group
Deutsche Bank reaffirmed Micro Focus as a ‘hold’ last week in the wake of the results, without specifying a price target on the shares, while JPMorgan Chase & Co, which sees the company as an ‘underweight,’ hiked its valuation on the stock from 900p to 1,120p. According to MarketBeat, the FTSE 100 group currently has a consensus ‘hold’ rating and an average price target of 1,296.11p.