Stifel Financial has agreed to buy the future business of Maine-based North Atlantic Capital, a venture capital management company. The financial terms of the deal were not disclosed. Shares of the investment bank rose 2.9% to close at $59.16 on Feb. 19.
With this acquisition, Stifel (SF) seeks to solidify its position as an active manager of small business investment corporations (SBIC) and venture capital (VC) funds. The company has also agreed to invest in the next North Atlantic SBIC.
Stifel Co-President Victor Nesi said, “We are pleased to find a partner with a strong investment track record and an experienced team that fits well in our culture.”
“Our plan is to leverage North Atlantic’s deep understanding of the venture capital markets to help us build out a robust services offering for privately held, high-growth technology businesses,” he added. (See Stifel stock analysis on TipRanks)
On Jan. 29, JMP Securities analyst Devin Ryan increased the stock’s price target to $60 (1.4% upside potential) from $56 and reiterated a Buy rating “following the company’s Q4 results.”
In a note to investors, Ryan said, “The company has grown revenues for 25 consecutive years, yet the Street consensus implies a 3% revenue decline in 2021.” He argues “Stifel’s guidance range implies revenue growth of 1% to 6.5% for 2021.”
Meanwhile, the Street’s consensus rating on the stock is a Hold. That’s based on 2 Holds, 2 Buys and 1 Sell. Looking ahead, the average analyst price target stands at $56.50, putting the downside potential at 4.5% over the next 12 months. Shares have increased almost 28% over the past three months.
According to TipRanks’ Smart Score system, Stifel gets a 7 out of 10, which indicates that the stock is likely to perform in line with market averages.