RGR Ups Price Target to $118 on Primus Telecommunications Group (PRTL).
NEW YORK, Feb. 16 /PRNewswire/ -- The following is being issued by RGR Financial Corp., a member of the National Association of Securities Dealers, CRD number: 40898:
RGR Financial Corporation, an investment banking firm based in New York City, today is upping its price target on its focus pick, Primus Telecommunications Group, Inc. (Nasdaq: PRTL - news) to $118 from $77 on a comparative buy-out basis.
Equity analyst, Joseph DiLustro of Alchemy Investment Strategies, Inc., has revised his valuation model on PRTL to a buy-out basis, since, according to DiLustro, PRTL is quickly becoming a ``total solutions provider' (TSP). DiLustro has calculated that the current enterprise value for PRTL is $1.950 billion. He further calculates that the Company's enterprise value/twelve month trailing revenue multiple is 2.34 times, based on $833 million in revenues for fiscal year ended 12/31/99. The multiple is less than the buy-out multiple that Viatel Inc. paid for Destia Communications Inc. last year of 2.75 times the stock price of Destia, according to DiLustro.
He sees a significant difference in value between the two companies. PRTL has a significant global presence as a provider of voice services, broadband capabilities and a growing presence in data services. According to DiLustro, PRTL is currently positioning itself to provide higher value added services that will differentiate PRTL from its competition, in rapidly growing markets. As of December 31, 1999, PRTL had 1.7 million customers and that number is expected to grow dramatically, both organically and by acquisitions over the next several years. As a total solutions provider, DiLustro expects PRTL to significantly increase its gross margins as well.
DiLustro expects PRTL to become an acquisition target during the year, as consolidation in the telecommunications market heats up.
At yesterday's stock price of $43, by applying a buy-out multiple of 2.75 (same as for Destia), DiLustro arrives at his new price target of $118 for PRTL by year-end 2000.
Contact: Chet Dubov, Senior V.P. for RGR Financial Corp., 212-350-1400, Research@RGRFinancial.com.
The information contained herein is based on sources believed to be reliable, but its accuracy, together with all estimates and forecasts, is not guaranteed and subject to change without notice. The information is not intended to be a complete record or analysis of the security mentioned, nor is it intended as an offer or solicitation to sell or buy any security mentioned herein, nor be a suitable recommendation for all investors. RGR Financial Corp. and/or their officers, employees and members of their families may, at times, have positions in any securities discussed, and may purchase or sell these securities, from time to time, in the open market. The securities mentioned may be sold to or bought from customers on a principal basis by this firm. The research commentary contains certain statements which express the belief, anticipation or expectation of future events and these statements only apply prospectively and should be considered only as forward-looking statements within the meaning and pursuant to the Safe Harbor provisions of the Securities Litigation Reform Act of 1995 and involve risks and uncertainties. The company's actual results may differ significantly from the results discussed in this research commentary.
SOURCE: RGR Financial Corp.
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