Sinch at attractive entry point - JPM starts with 'overweight'

Sinch AB (publ)

25/10/2022 11:54

** J.P.Morgan initiates coverage of Swedish cloud
communications specialist Sinch  SINCH.ST  with an "overweight"
rating, seeing the company's current trading levels as an
attractive entry point
    ** The brokerage notes Sinch suffered a "fall from grace"
when its share price, hit by market wide de-rating of growth
stocks and the company's operational headwinds, lost 90% of its
value from 2021 highs
     ** JPM says it finds the current valuation compelling and
sees overhangs related to asset integration issues and
accusations of accounting irregularities, slowing organic growth
and short interest, now clearing 
    ** It adds the recently pre-released Q3 results, which it
calls "reassuring", indicate that the company's operational
trends are also recovering
    *** "Should trends continue inflecting, and a new CEO be
appointed near term, this could help restore confidence," JPM
says
    ** The broker sets target price for Sinch at SEK 45,
implying a 90% upside versus Monday's close price 
    ** Out of nine analysts that cover the company's stock, four
rate it "strong buy" or "buy", four rate it "hold and one rates
it "sell"
    ** At 1030 GMT Sinch share price is up 6% 
 (Reporting by Marta Frackowiak)
 ((marta.frackowiak@thomsonreuters.com))