After Plunging -11.25% in 4 Weeks, Here's Why the Trend Might Reverse for EQT (EQT)
EQT (EQT) has become technically an oversold stock now, which implies exhaustion of the heavy selling pressure on it. This, combined with strong agreement among Wall Street analysts in revising earnings estimates higher, indicates a potential trend reversal for the stock in the near term.
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Keywords Studios set to recommend $2.5 billion takeover by EQT
Keywords Studios said on Friday it was ready to agree to a 1.96 billion pound ($2.48 billion) takeover by EQT Group if the European private equity firm tabled a formal offer at that price despite it being lower than what it proposed in May.
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Why Is EQT (EQT) Up 4.5% Since Last Earnings Report?
EQT (EQT) reported earnings 30 days ago. What's next for the stock?
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Video Game Maker Keywords Studios Soars After EQT Takeover Talks
London-listed Keywords Studios surged 60% in intraday trading Monday after the video game maker said it was "in advanced discussions" to be acquired by private equity firm EQT for 25.50 British pounds per share.
Keywords Studios' stock surges as videogame company mulls improved £2 billion bid from EQT
Keywords Studios, which develops software used to make video games, saw its share price surge on Monday, on news it is considering agreeing to an improved offer from EQT that would see it fully acquired by the Swedish private-equity firm for £2 billion ($2.5 billion).
EQT Co. (NYSE:EQT) Stock Holdings Boosted by Panagora Asset Management Inc.
Panagora Asset Management Inc. increased its position in EQT Co. (NYSE:EQT – Free Report) by 43.1% during the fourth quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 74,657 shares of the oil and gas producer’s stock after acquiring an additional 22,473 shares during the period. Panagora Asset Management Inc.’s holdings in EQT were worth $2,886,000 at the end of the most recent reporting period. Several other hedge funds have also recently bought and sold shares of EQT. Vanguard Group Inc. boosted its position in EQT by 8.6% during the 3rd quarter. Vanguard Group Inc. now owns 44,899,640 shares of the oil and gas producer’s stock worth $1,822,027,000 after acquiring an additional 3,539,661 shares during the period. Wellington Management Group LLP lifted its holdings in EQT by 61.9% in the third quarter. Wellington Management Group LLP now owns 19,687,594 shares of the oil and gas producer’s stock worth $798,923,000 after purchasing an additional 7,526,875 shares during the period. Charles Schwab Investment Management Inc. grew its position in EQT by 15.5% in the 4th quarter. Charles Schwab Investment Management Inc. now owns 3,865,008 shares of the oil and gas producer’s stock valued at $149,421,000 after buying an additional 519,294 shares in the last quarter. Northern Trust Corp increased its stake in EQT by 8.9% during the 3rd quarter. Northern Trust Corp now owns 3,657,338 shares of the oil and gas producer’s stock valued at $148,415,000 after buying an additional 300,326 shares during the period. Finally, Dimensional Fund Advisors LP raised its position in shares of EQT by 12.1% during the 4th quarter. Dimensional Fund Advisors LP now owns 3,534,575 shares of the oil and gas producer’s stock worth $136,658,000 after buying an additional 380,564 shares in the last quarter. 90.81% of the stock is currently owned by institutional investors. Analyst Upgrades and Downgrades A number of research analysts recently commented on the stock. Truist Financial lowered their price objective on shares of EQT from $37.00 to $35.00 and set a “hold” rating on the stock in a research note on Friday, April 5th. Piper Sandler reaffirmed an “overweight” rating and set a $46.00 target price (up from $41.00) on shares of EQT in a report on Tuesday, April 30th. JPMorgan Chase & Co. reissued a “neutral” rating and issued a $37.00 price target (down from $39.00) on shares of EQT in a report on Wednesday, March 20th. Scotiabank raised their price objective on shares of EQT from $52.00 to $54.00 and gave the company a “sector outperform” rating in a research report on Thursday, May 9th. Finally, Wells Fargo & Company downgraded shares of EQT from an “overweight” rating to an “equal weight” rating and dropped their target price for the stock from $48.00 to $37.00 in a report on Wednesday, April 17th. One analyst has rated the stock with a sell rating, eight have issued a hold rating and ten have given a buy rating to the company’s stock. According to data from MarketBeat.com, EQT presently has an average rating of “Hold” and an average target price of $44.94. Get Our Latest Report on EQT EQT Stock Performance Shares of EQT stock opened at $41.17 on Monday. The company has a market capitalization of $18.18 billion, a price-to-earnings ratio of 29.83 and a beta of 1.09. EQT Co. has a 1-year low of $32.07 and a 1-year high of $45.23. The company has a current ratio of 0.88, a quick ratio of 0.88 and a debt-to-equity ratio of 0.32. The stock’s fifty day simple moving average is $37.45 and its 200-day simple moving average is $37.63. EQT (NYSE:EQT – Get Free Report) last released its earnings results on Tuesday, April 23rd. The oil and gas producer reported $0.82 earnings per share for the quarter, beating the consensus estimate of $0.65 by $0.17. The company had revenue of $1.30 billion for the quarter, compared to analysts’ expectations of $1.58 billion. EQT had a return on equity of 4.57% and a net margin of 10.96%. The business’s revenue for the quarter was down 28.8% on a year-over-year basis. During the same quarter in the previous year, the business posted $1.70 EPS. On average, sell-side analysts predict that EQT Co. will post 1.03 earnings per share for the current fiscal year. EQT Dividend Announcement The business also recently disclosed a quarterly dividend, which will be paid on Saturday, June 1st. Shareholders of record on Wednesday, May 8th will be paid a $0.1575 dividend. The ex-dividend date is Tuesday, May 7th. This represents a $0.63 annualized dividend and a yield of 1.53%. EQT’s dividend payout ratio is presently 45.65%. EQT Profile (Free Report) EQT Corporation operates as a natural gas production company in the United States. The company sells natural gas and natural gas liquids to marketers, utilities, and industrial customers through pipelines located in the Appalachian Basin. It also offers marketing services and contractual pipeline capacity management services.
Keywords Studios up 62% after EQT approach; could the ante be upped?
Keywords Studios PLC (AIM:KWS, OTC:KYYWF) saw its shares jump 62% in early trading after confirming a £2.2 billion bid approach from EQT Group. The proposed deal, which offers £22.50 per share, represents a more than 50% premium to Keywords' last closing price. Shareholders would also receive a final dividend payment if the acquisition proceeds. Keywords, which provides services to the gaming industry, stated this bid was one of several from the private equity firm. However, the board indicated this particular offer might be recommended. EQT, managing around £200 billion in assets, has until June 15 to make a formal offer. The company, which serves clients like Activision Blizzard and Tencent, has faced challenges with its share price dropping nearly 50% since September 2021 due to concerns over AI replacing some of its services. Despite this, the board remains confident in its growth strategy, which EQT supports. In early trading, the stock was up 904p at £23.74 - £1.24 above the indicative offer (and suggesting the bid may go higher). Shore said the current deal surpassed its fair value for the stock, which was around £18. Peel Hunt said the offer represented 12 times underlying earnings (EBITDA), which was essentially the level at which Keywords shares were trading before confidence was undermined by the threat posed by generative AI. The broker points out that recent gaming platform take-outs have completed at an average of 16 times EBITDA. Sumo Group, a company very similar to Keywords, was acquired at a multiple of 32 times n 2021, while Codemasters, a publisher and developer of its own games, was acquired at a multiple of 31 times in December 2021, Peel Hunt noted. Ocado Group PLC (LSE:OCDO) is in the midst of an identity crisis. Ocado, via its ocado.com joint venture with Marks & Spencer Group plc, operates its own online grocery store in the UK. This we all know; Ocado vans are a mainstay of Britain’s congested traffic lanes. But at its heart, Ocado is – or is at least trying to position itself as – a technology company. Not everyone has got the memo though, particularly Britain’s investment class, which has refused to price Ocado’s shares in alignment with other tech stocks. This has led rumours swelling that Ocado is poised to handle its identity crisis in the same fashion as many other British technology companies before it- by moving its primary listing stateside. Some have completely dismissed these rumours, including Shore Capital Markets’ Clive Black, who in April called it a “stunt from wherever to boost the heavily loss-making British ‘tech’ company’s share price”. But is there a legitimate point behind the rumours and if so, what would be the justification for Ocado seeking a more welcoming investment class outside of the Square Mile? By the numbers Technology is without a doubt Ocado’s fastest-growing sales line. In full-year results published in February, technology sales grew 44% year on year while retail grew just 7%. Tech is still a significantly smaller segment though, bringing in £429 million worth of sales in 2023 compared to retail’s £2.4 billion-plus. Any potential divorce between the two would make Ocado a substantially smaller operation. It would also make Ocado “higher quality, with higher margins, more recurring revenue and much lower capex”, said one investment analyst speaking with Proactive on the matter. As of 17 May, Ocado’s share price is effectively a 1:1 ratio of all combined operations on a price-to-sales basis. If using Ocado’s forward guidance of mid-to-high single-digit revenue growth, the PS ratio dips below 1:1. Not unheard of in the low-margin retail space, but criminally cheap in the tech space. Undervalued, underappreciated Simply put, Ocaco is objectively undervalued as a tech company. But according to the analyst, this is “not necessarily a lack of understanding” among the investment community. “It might be more about a lack of belief in the business model, especially compared to North American investors who are more open to futuristic bets.” Ocado also has a history of disappointing financial results, breeding further scepticism among Square Mile investors. Garyth Stone, managing director of investment bank Houlihan Lokey (NYSE:HLI)’s consumer, food and retail group, said: “The UK market focuses more on cash flow, profitability, and dividend stability… If (Ocado moved its listing) to the NASDAQ, it might get a fresher perspective from US investors.” True, British tech companies do command superior valuations stateside (hello Arm Holdings PLC (NASDAQ:ARM)), but there is a key difference between Ocado and Arm, or indeed other British companies that have made the move, such as Darktrace and non-tech companies like Flutter. These companies that have moved stateside have done so partially because that is where most of their sales come from. Ocado, on the other hand, is still a UK-centric business. Stone agreed that US investors prefer companies with significant US sales, “but listing on the NASDAQ, which is more internationally focused than the New York Stock Exchange, could still be beneficial. It's not a magic bullet, but it could be a sensible move”. Spinning out Listing change or no listing change, some analysts see a spinning out of Ocado’s retail operations as a very logical next step that is likely being considered by management. AJ Bell analyst Russ Mould echoed this sentiment: "In doing so, Ocado would no longer be associated with the little vans that deliver loaves of bread to Mrs Miggins. That act in itself would be an important first step in trying to get the market to look at the business in a different way." This may have already been foreshadowed with the recent addition of Gavin Patterson to the board. As former chief executive of BT and former president and chief finance officer of Salesforce, Patterson ticks all of the boxes- B2B, tech and US capital markets. It’s almost too convenient. Commenting on his addition to the board, Patterson called Ocado “a true technology pioneer… It has developed and proven applications of AI and robotics that solve some of the most complex supply chain challenges in grocery and logistics. I look forward to working with the board and the leadership team at this exciting time”. Whether this ‘exciting time’ is an allusion to a stateside move will be determined in due course. One thing is for certain- the recent controversy over Ocado’s chief executive Tim Steiner’s salary won’t have sweetened London’s appeal. Dissenting shareholders (comprising nearly a fifth of total votes) were vexed at Steiner’s potential £15 million remuneration package, given shares are off 88% since the pandemic-era Halcyon days. Shareholder advisory firms, meanwhile, criticised Ocado’s refusal to pay a real living wage. All valid points that nonetheless feed into the thesis for listing in a place where middling issues like 1,800% bonus multipliers and fair hourly wages aren’t as contentious. Putting the ‘how’ aside, there is little doubt that Ocado needs to make big changes to turn the ship around and recover lost value. Don’t be massively surprised if the Square Mile loses another member in the process.
Keywords Studios Shares Have Best Ever Day After $2.58 Billion EQT Takeover Talks
By Ian Walker Keywords Studios' shares rose in early trade after the company said that it is in talks with European private equity company EQT Group over a potential 2.03 billion pound ($2.58 billion) takeover, which would make it the latest in a series of companies to leave the London Exchange if the deal goes ahead. Shares at 0739 GMT were up 904.0 pence, or 62%, at 2,374.00 pence, marking their best ever rise since the company floated on the London Stock Exchange in June 2013 at 123 pence. The London-listed videogame services company said Monday that it is in advanced talks over a possible cash offer worth 2,550 pence a share, a price it would be prepared to recommend to shareholders if a formal offer was made. The price is a 73% premium to Keywords' closing price of 1,470 pence on Friday. The company said that shareholders would be able to keep the final dividend of 1.76 pence that was declared on March 31 and payable June 28. Keywords said that the board has received four unsolicited proposals from EQT in recent months which it rejected. The latest proposal is subject to a number of conditions being met including due diligence, it added. Keywords said that it remains confident in the company's growth strategy both organically and through acquisitions, and that EQT is supportive of this strategy. EQT has until June 15 to make a formal takeover for Keywords or walk away under U.K. Takeover Panel rules. EQT has been investing in the U.K. for nearly two decades and last June bought veterinary pharmaceuticals company Dechra for nearly $5.6 billion, Europe's biggest leveraged buyout at the time. Last week Royal Mail owner International Distribution Services said that it had received an improved GBP3.5 billion takeover proposal from Czech billionaire Daniel Kretinsky's EP Corporate Group that it would be prepared to recommend to shareholders if a formal offer was made. If the takeovers go ahead then the companies would delist from the London Stock Exchange, marking further woes for the city bourse following a string of recent defections. Irish building-materials supplier CRH, which was listed on London's FTSE 100 index, moved its main listing to New York in September. Flutter Entertainment--which houses FanDuel, PokerStars, and Paddy Power among its brands--started trading in New York on Jan. 29 and will make that its prime listing from May 31, while German travel company TUI AG shareholders approved the company's London delisting plan in February. British chip maker Arm Holdings chose New York over London for its stock market return and most recently Indivior said that it planned to switch its main listing to the U.S, while retaining a secondary listing in the U.K. Write to Ian Walker at [email protected] (END) Dow Jones Newswires 05-20-24 0356ET
