EAB Group announced a FY 2021 guidance upgrade yesterday driven by positive sales development in H1. The bullish tone in the financial markets has supported demand for both UCITS funds and Alternative Investment (AI) funds, we believe. The growth in AI business, especially, facilitates the growth in recurring revenue over the long term and improves the earnings quality. The progress of the AI fund pipeline could be a positive trigger in the H1 report but we expect profitability to remain below consensus in the short term (we are 19% below consensus for 2021 EPS). We raise 2021E-22E EBIT by 8-11% and our fair value to EUR 2.7-3.3 per share (2.5-3.0) based on the median of four valuation methods. Marketing material commissioned by EAB Group Oyj.
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