Numis Securities takes tougher stance on Arrow Global

28th Aug 2014 13:45

Numis Securities has eased back its recommendation on debt purchaser and manager Arrow Global, but said that the company had done well against rivals.Arrow on Thursday said it had a strong first half as adjusted earnings rose 10.6% to £48m and it bought good quality loan portfolios worth £1.05bn for £99.3m. But it said the industry was likely to consolidate to cope with more regulation.Numis, which is moving to an 'add' from a 'buy' with a 285p target price, said the company had achieved a good underlying half-year performance.It said the company had good potential to expand by acquisition as there were "a number of potentially very sizeable portfolios for sale in Arrow's core markets as banks continue to fail and restructure".But the broker hinted that it believed the stock was adequately valued and may find it tougher to keep up the pace."Arrow has performed well against the sector recently and as a consequence our recommendation moves to 'add' from 'buy' with our target price being unchanged."Shares fell 3.25p or 1.3% to 243.75p by 14:06 in London.PW