Tekcapital shares rose on Monday after the technology investment company received a reiterated ‘buy’ rating and revised share price target.
Equity analysts at SP Angel have given Tekcapital a 20.7p price target, suggesting 100% upside from the share price at the time the note was published.
Tekcapital shares rose shortly after the note was released to trade at 11.4p.
SP Angel’s note was issued after portfolio company MicroSalt listed on London’s AIM last week, cementing the value in Tekcapital’s holding.
After a rapturous debut, the MicroSalt share price has continued to appreciate inferring deep value in Tekcapital’s current share price.
At the time of writing, MicroSalt’s market cap stood at £23.7m valuing Tekcapital’s 77% stake at £18.2m. Tekcapital’s entire market cap was £19m on Monday morning, completely discounting the value in the firm’s other three portfolio companies.
Further supporting Tekcapital’s investment case, analysts at SP Angel said that while the current portfolio company valuations support upside in the share price, they felt market valuations are somewhat depressed, suggesting a higher indicative price target, should the portfolio companies rerate.
“In our view, the stock trades at a double discount to its long-term potential because the underlying prices that constitute the majority of our fair value target are themselves depressed,” SP Angel wrote in the note released on Monday.
Tekcapital shares were 14% higher at the time of writing.