International Personal Finance shares boosted by Berenberg rating upgrade

LONDON (ShareCast) - Shares (Berlin: DI6.BE - news) in International Personal Finance (LSE: IPF.L - news) shot up 5.9% to 494p after Berenberg Bank promoted its rating on the stock to 'buy' from 'hold'. The bank said IPF shares have struggled over the last year, underperforming the Stoxx Financial Services index and the FTSE 250 by around 45% and 18%, respectively.

"While FX and regulatory fears are weighing on the shares, IPF is exposed to significant long-term growth opportunities," said Berenberg.

"We see recent share price weakness as a buying opportunity as we expect the near-term headwinds (FX and investment costs) to begin to fade in 2016 and beyond," the broker added.

The bank also raised its target price on the stock but reduced earnings estimates by 8-9% in 2015/16, mainly due to FX impact.

"(Trading) on 10.5 time 2016 earnings for 11% earnings per share compound annual growth rate, we believe IPF is trading on a low multiple on earnings, which now reflect the large drag of FX and investment costs. We see current share price weakness as a buying opportunity for long-term investors," said Berenberg.