Shares of UK-listed cybersecurity firm which debuted in April slip after analyst gave it a sell rating

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Shares of cybersecurity firm Darktrace fell in London on Monday after an analyst sold its shares, saying the shares are highly overvalued.

DARK Darktrace,
-19.73%
the stock fell nearly 20% after a team of Peel Hunt analysts led by Oyvind Bjerke launched a hedge on the company with a sell rating and target price of 473 pence, implying a drop about 50% off Monday’s 1,037 pence price. Darktrace debuted on the London Stock Exchange in April with a 40% gain.

“Its growth has been driven by its powerful go-to-market strategy, targeting the need for businesses to strengthen their cybersecurity defenses. While we believe the high growth rates will continue, we are also seeing a disconnect between valuation and the ultimate income opportunity, ”said Bjerke and the team.

“After taking into account the potential size of the market, the intensification of competition and the limited R&D of Darktrace [research and development] spend, we take an approach more based on our valuation, giving a target price of 473 pence, ”analysts said.

Elsewhere, banks and energy names kept the FTSE 100 in the dark on Monday as the rest of Europe struggled for traction.

The FTSE 100 UKX,
+ 0.27%
rose almost 0.4% to 7,231. The GBPUSD pound,
+ 0.03%
was slightly higher at $ 1.3756. The best sector on the London Stock Exchange was finance and the worst was technology.

Heavy goods vehicle HSBC HSBC,
+ 0.70%
the stock climbed 1% after the banking giant reported third quarter net profit more than doubling from a year ago, beating expectations, and announced a share buyback program of up to 2%. billions of dollars.

The profit overshoot was upped by a substantial net ECL release (expected credit loss) of $ 659 million, Goodbody analyst John Cronin and Ronan Dunphy noted in a note to clients. The company also reported “an improving revenue environment with fee growth in many of its businesses” and stabilizing net interest income with growth expected in the next quarter, they added.

Associated British Foods ABF,
+ 2.46%
was the biggest winner of the FTSE 100, up about 1.8%.

Energy companies led the way with US CL00 crude prices,
+1.48%
pushed to $ 85 a barrel and Brent BRN00,
+ 0.15%
exceeded this level. BP BP shares,
+ 1.76%

BP,
+ 0.49%
and Royal Dutch Shell RDS.A,
+ 0.54%

RDSA,
+1.69%
increased by more than 1% each.


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