HMC Capital shares rally as Bell Potter upgrades to 'buy'
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The news: HMC Capital shares gained on the ASX as Bell Potter upgraded its rating on the asset manager to 'buy'.
The numbers: HMC shares were up 4% to $10 by 12:20pm AEDT, and was the best performer across the ASX 200.
It has slumped around 17% since the company's new real estate investment trust DigiCo Infrastructure REIT floated on the ASX a week ago.
Bell Potter upgraded its rating on HMC from 'hold' to 'buy' and hiked its earnings-per-share estimates by 33% to 37% between FY25 and FY27.
The context: Bell Potter analyst Andy MacFarlane said it has been a "remarkable half year period" for HMC, despite a "turbulent week".
He noted that HMC's listing of DigiCo and recent acquisition of Neoen's Victoria assets have seen its 'medium term' target for funds under management of $20 billion become its FY25 target.
MacFarlane noted the recent sell-off provides an "attractive entry point" with the company's fee-earning capability set to increase further. HMC also screens cheaper than rival global alternative asset managers and real estate fund managers, he said.
Bell Potter acted as co-lead manager for DigiCo's IPO and capital raising in November, and received fees for that service.
The sources: The Coppo Report, Bell Potter research
