UBS has a $1.45 buy rating on HUM The $320m sale of Humm's...

UBS has a $1.45 buy rating on HUM



The $320m sale of Humm's unprofitable buy now pay later consumer finance business to Latitude "makes sense", UBS says in note to clients.

Humm's board, excluding director and significant shareholder Andrew Abercrombie who is opposed to the sale, "reinforced the merits" of the sale to shareholders on Monday, including an extraordinary revelation of the performance of the business over four months to April and the falling share prices of BNPL peers since January.

At 1.30pm AEST, Humm shares are trading 0.3 per cent higher at 76c, but that is down more than 17 per cent since the start of the year. That year-to-date slide compares to Zip's 78.6 per cent decline, an 82 per cent fall in Sezzle's value and Openpay's 68 per cent slump.

"For HUM shareholders, we highlight the re-rate opportunity in Commercial (Humm's leftover business) which has continued to deliver "strong and profitable growth", UBS says.

It has a buy rating on Humm with a price target of $1.45.