UBS ups Flow Traders to 'neutral' on balanced risk-reward profile

Flow Traders

01/11/2022 12:47

** UBS upgrades Flow Traders  FLOW.AS  to "neutral" from
"sell" citing the Dutch trading services provider's balanced
risk-reward profile
    ** The broker says while the upside is limited given the
group's expansion plans, Flow Traders's downside also looks
limited as valuations are undemanding and the strength of the Q3
results will likely drive positive revisions to consensus
    ** According to USB, while the group has dedicated
significant resources to its U.S. and Asia expansions, these two
regions accounted for just 22% of its Q3 revenues, the lowest
quarterly percentage on record and also the lowest on 4-quarter
rolling basis
    ** It welcomes the recent Flow Traders' corporate
restructuring, which the group is relocating to Bermuda, and
says it should improve its competitiveness, increase the
efficiency of its regulatory capital and facilitate M&A
   ** However, the broker warns investors will want tangible
evidence of these improvements before rewarding the shares
    ** "We don't expect the changes to be sufficient for the
company to achieve its ambitious 20% annual organic revenue
growth rate", the broker notes
    ** Among 5 analysts covering the stock, two rate it "strong
buy/buy" and three "hold"
 (Reporting by Diana Mandiá)
 ((diana.mandiaalvarez@thomsonreuters.com))