In a report released on February 25, Andrea Zampaloni from Alantra Equities maintained a Buy rating on Powersoft S.p.A. (PWS – Research Report), with a price target of €21.00.
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Andrea Zampaloni has given his Buy rating due to a combination of factors that highlight Powersoft S.p.A.’s strategic growth potential and financial health. The acquisition of a 51% stake in K-Array is a significant move that enhances Powersoft’s position in the professional audio market, transitioning it from a product-based company to a comprehensive solutions provider. This acquisition is expected to be transformative, offering a strategic fit with attractive transaction multiples and preserving the company’s strong balance sheet.
Furthermore, the deal structure is compelling, with options to acquire the remaining stake and potential earn-outs contingent on performance targets. The anticipated synergies from the acquisition are expected to drive significant EPS growth, with projections of over 20% accretion by FY25 and FY26. Powersoft’s enhanced geographic reach and entry into new verticals, along with its strong cash generation, support a robust dividend yield. These factors, combined with the company’s undervaluation compared to peers, underpin the Buy rating and the increased target price of €21.0 per share.