On Thursday, Plus500 (LON:PLUSP) Ltd (PLUS:LN) (OTC: PLSQF) experienced a change in stock rating as Canaccord Genuity altered its recommendation from Speculative Buy to Hold. Accompanying this downgrade, the firm also increased the price target for the online trading platform to GBP26.50, up from the previous GBP18.83.
The revision in the price target by Canaccord Genuity was influenced by an update to the projected earnings per share (EPS) for the calendar year 2025 (CY25E). The analyst noted a 10% upgrade in CY25E EPS which, along with an increase in the long-run price-to-earnings (PE) ratio from 8x to 8.5x, contributed to the new price target. Moreover, the surplus capital, amounting to 457p per share, was factored into the revised target.
The analyst pointed out that Plus500's shares have seen a significant year-to-date increase, climbing by 51%. However, with the new price target suggesting only a 6% potential upside, Canaccord Genuity has decided to adjust the stock's rating to Hold.
The firm's decision to modify its stance on Plus500's stock reflects a reassessment of the company's valuation in light of recent share performance and updated earnings projections. The updated target price of 2650p is a result of the revised PE ratio and the inclusion of surplus capital in the valuation model.
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