Berenberg ups target price on Wilmington as Spanish regulator clears deal

(Sharecast News) - Analysts at Berenberg raised their target price on Wilmington from 460p to 485p on Monday after the information services provider announced it had received Foreign Direct Investment clearance from the Spanish regulator for its €121.6m acquisition of a regulatory technology software business Conversia. Berenberg noted that the clearance leads to a completion date in line with the deal's original timetable and confirms that Conversia will make about a seven-month contribution to Wilmington's FY26 results.

"We update forecasts today for the effects of the deal, leading to an 8% upgrade to our FY27 EPS forecast in Conversia's first full year in the group. This results in an EPS CAGR of 10.1% from FY25 to FY27 and drives a rise in our price target to 485p (from 460p), offering material upside of 61% to the current share price," said Berenberg.

The German bank, which reiterated its 'buy' rating on the stock, sees "a clear mispricing in the shares at present", currently trading on a 10.8x FY27 price-to-earnings ratio on its newly upgraded forecasts.

"This contrasts with Wilmington's high earnings quality (c70% recurring), healthy EBIT margins (nearing 24%), re-emerging organic and acquisitive growth and a dividend yield now exceeding 4%," added Berenberg.

Following the announcement of the regulatory clearance, a later update confirmed that Wilmington's chief executive and chair had purchased a combined 18,315 shares at prices ranging from 298p to 302p, something it views as "a sign of their confidence" in Wilmington's outlook and current undervaluation.

Reporting by Iain Gilbert at Sharecast.com