Canal+ Shares Drop as UBS Assesses Stock Valuation as Fair Following London Launch -

Canal+ shares saw a significant drop after UBS Group AG stated that the stock is fairly valued, which contrasts with the optimistic predictions from various analysts following the company’s recent launch in London earlier this week.

The stock plummeted by as much as 19%, hitting 191.10 pence, with UBS analysts, including Ben Shelley, starting coverage with a neutral rating and establishing a price target of 240 pence.

UBS highlighted Canal+’s ongoing acquisition of MultiChoice, noting its struggles with declining profits in South Africa and rising free cash flow losses due to currency fluctuations.

“The potential for value erosion stemming from the MultiChoice deal leads us to take a more cautious approach regarding the equity narrative,” Shelley remarked.

In sharp contrast, CIC Market Solutions reported on Thursday that it expects shares to rise to 450 pence, claiming that the market has already factored in the risks tied to MultiChoice.

Canal+ was the largest of three entities spun off from its parent company, Vivendi SE. Its debut on the London Stock Exchange was seen as a positive step for the exchange, amid a trend of companies shifting their primary listings to New York in light of funds moving away from UK equities.

Furthermore, Vivendi also separated its advertising arm, Havas NV, and publisher Louis Hachette Group for independent listings on Monday. However, after Canal+’s decline on Thursday, the total market value of Vivendi and its three spin-offs was reported to be 10% lower than Vivendi’s standalone valuation on December 13, according to Bloomberg’s calculations.

Stay informed with comprehensive finance and business news from Moneyweb on WhatsApp here.