Stifel poses key questions around Hipgnosis' future capital growth prospects

Downgrades stock to 'neutral'

David Brenchley
clock • 6 min read

Stifel has raised questions over the methods used to value Hipgnosis Songs Fund's portfolio, which it believes will limit future capital gains in favour of short-term share price boosts.

The broker also queried whether the six-month lag between when revenue is booked and when cash is actually received could lead to collection estimates to be inaccurate. Hipgnosis has been able to raise cash at a fast pace since its July 2018 IPO, growing from £200m to over £1bn today, with share price gains of 27.9% eclipsed by a net asset value increase of 38.6%. Indeed, the company's NAV is up 26.9% in the past nine months on continued positive catalogue re-valuations and a reduced rate of the discount applied to its portfolio of music rights. Music royalties to play bigger part ...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

Trustpilot