Novatti Group Limited (NOV) - Acquiring licences drive strong...

Novatti Group Limited (NOV) - Acquiring licences drive strong upgrade

Novatti’s granting of acquiring licences by leaders within the payments industry is in our view a significant milestone in the company’s development as it advances along the payments value chain. These licences provide access to the Payment Aggregator market which we estimate to be a A$100m EBITDA opportunity. We have upgraded our FY23F and FY24F EBITDA estimates substantially and see significant further upside from current levels as the business continues to expand into new verticals. We have increased our target price to A$1.00 (from A$0.85), implying 140% upside and reiterate our Buy recommendation.

There's no doubt that Petra tries to support the companies it does CR for, but they obviously don'r always pick winners. It's "upgrades" like this that present severe cognitive dissonance - the technicals looks terrible with the down trend showing no sign of reversing, and the seller seems intent on exiting as gently as possible. While one is tempted to top up on such a bullish analyst upgrade, doing so in other Petra backed companies like G1A, GPR, STX and WGO to name a few has been "expensive".
It just goes to show that one ignores technicals at your peril .... the market mostly gets it right.

I've changed my sentiment to hold.