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Investing.com - Jefferies has downgraded Gentrack Group Ltd (ASX:GTK) from Buy to Hold while reducing its price target to AUD11.00 from AUD14.00.
The downgrade comes after Jefferies factored in the results of several recent contract tenders that were unsuccessful for Gentrack, signaling increased competitive pressures for the company.
Despite the downgrade, Jefferies noted that the broader industry outlook continues to provide tailwinds for Gentrack’s business prospects, though this positive factor is now offset by heightened competition.
Jefferies has increased its discount rate in its valuation model to reflect greater near-term uncertainty surrounding Gentrack’s business performance.
The new price target of AUD11.00 is based on a discounted cash flow (DCF) analysis that incorporates these revised market conditions and competitive landscape.
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