RBC maintains Outperform rating on PagerDuty after report on takeover interest

RBC Capital notes that “an unsubstantiated Bloomberg article” said that PagerDuty could be considering options amid takeover interest from private equity. While acknowledging “no knowledge of a pending transaction,” the firm notes it has long thought that PagerDuty “could be an interesting M&A candidate” and wrote about that view earlier this week as part of its 2024 software outlook. Using the firm’s current estimates and the average software PE takeout multiple over the past three years implies $37 per share, with $41, the firm’s current upside scenario, “not out of the question,” according to the analyst, who maintains an Outperform rating and $31 price target on PagerDuty shares.