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Constellation Software gets price target raise at Euro Pacific Canada

Constellation Software

Constellation Software Large acquisitions could bolster the fatigued prospects of Constellation Software (Constellation Software Stock Quote, Chart, News: TSX:CSU), says Euro Pacific Canada analyst Andrej Krneta.

Tomorrow, after market close, Constellation will report its Q1, 2015 results. Krneta expects sales will be essentially flat, but in a research update to clients this morning he raised his one year price target on the stock from $420 to $490, while maintaining his “Hold” rating. The analyst explained the reasoning behind his decision, which places his projected return on Constellation at just 1%.

“Currency travails, competitive deal environment, and a thin news-flow in the quarter are set to confirm a slow start to the year,” he said. “Soft organic growth is a concern. But it may take the back seat to rising expectations of large acquisitions. The recent announcement of a C$200M capital raise is encouraging. Thus, we have increased our price target to C$490 to reflect the potential growth recovery”.

Krneta thinks Constellation will post revenue of $439.9-million in the first quarter, a little under the street consensus of $446-million.

HIRE Technologies

The analyst believes Constellation’s March follow on raise is a clear signal that it intends to target large transactions.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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