Provident share price tumbles as Jefferies trims rating
Shares in Provident Financial Group (LON:PFG) have posted a hefty loss in today’s session, as analysts at Jefferies trimmed their rating and price target on the troubled subprime lender. The downgrade marks another blow for the company, which posted a profit warning earlier this month, and is set to exit the benchmark FTSE 100 index next month, following a hefty selloff in the shares.
As of 13:44 BST, Provident’s share price had given up three percent to 864.50p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.71 percent higher at 7,417.22 points. The group’s shares have lost more than 71 percent of their value over the past year, and are down by just under 70 percent in the year-to-date.
Analysts at Jefferies lowered their stance on Provident from ‘buy’ to ‘hold’ today and trimmed their rating on Provident from ‘buy’ to ‘hold,’ and slashed its price target on the shares from 3,487p to 940p. The move came after the company recently warned on profits, scrapped its payout to shareholders, announced the departure of its chief executive, and further revealed that its Vanquis Bank was under investigation by the Financial Conduct Authority (FCA).
Sharecast quoted the analysts as explaining in a note to clients that the troubled subprime lender and its management’s confidence that the home credit operation could achieve medium-term pre-tax profit of £150-million+ post the change to its operational model had ‘proved to be woefully optimistic’.
“In our opinion the group should not operate without an experienced CEO for long; to us the current CFO, Andrew Fisher, appears to have grasped the gravity of PFG’s current position and should fill the CEO position, even if in an interim capacity,” the broker pointed out.
As of 14:09 BST, Thursday, 31 August, Provident Financial plc share price is 864.50p.
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