Cazenove hikes Micro Focus target over big SUSE windfall

17th Dec 2018 15:35

(Sharecast News) - JP Morgan Cazenove upped its target price on Micro Focus on Monday to reflect the cash inflow from the $2.54bn disposal of the SUSE business segment.Cazenove analysts upped the target prices to 1470p from 1120p, with the sale approved by shareholders in August and expected to complete in the first quarter of 2019.The new target price also takes account of $171m share buybacks so far completed and further share buybacks anticipated to a combined aggregate value of $400m."Our model reflects the discontinuation of SUSE from FY19 onwards, though our FY18 estimates still include SUSE (as this is how the company will be compared against its original guidance)," analysts said. They expect a $1.6bn return of value in the second half of next year on top of the share buybacks, which sees explains the adjusted diluted earnings per share neutrality in FY19 despite the loss of SUSE profits and also the double digit EPS accretion in FY20.