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On Monday, Barclays (LON:BARC) analyst Mick Pickup upgraded Viridien shares (VIRI:FP) to Equalweight from Underweight, with a new price target set at €100.00, up from €65.00. The upgrade comes after Viridien secured a significant refinancing deal of $1.1 billion, which is expected to provide the company with financial stability and the ability to reduce its debt substantially by 2030.
Pickup noted that this refinancing marks the end of a nearly decade-long restructuring period, transforming Viridien into an asset-light processing company with a stable earnings profile and a valuable data library. The analyst highlighted that Viridien is on track to generate around $100 million in net cash flow in 2025, approximately 17% of its market capitalization.
The substantial increase in the price target reflects a 54% rise in equity valuation, which is still tempered by a 13% discount rate due to the company’s high debt levels. Pickup suggested that as debt levels decrease and the discount rate is potentially reduced to the more typical 10% used across the sector, Viridien’s valuation could approach €160 per share. This hypothetical valuation is supported by a sum-of-the-parts (SoTP) style assessment.
Despite the positive outlook and raised target, Pickup cautioned that it may take time for investor confidence to return to Viridien shares. The analyst also pointed out that there are more attractive investment opportunities with similar upside potential in more liquid stocks within the sector.
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