DA Davidson keeps Alight at buy with $14 stock target after sale deal
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On Wednesday, DA Davidson maintained a Buy rating on Alight Solutions (NYSE:ALIT), with a set stock price target of $14.00. The firm’s stance comes in light of Alight’s recent announcement regarding the sale of its Payroll, Human Capital Management (HCM) Outsourcing, and Professional Services businesses. The transaction involves an affiliate of H.I.G. Capital and could be valued at up to $1.2 billion.
The company also declared an increase in its share repurchase program, adding $200 million to the existing $48 million authorization. DA Davidson perceives the deal favorably, noting that it will result in a business with a more stable recurring revenue stream, improved profit margins, and reduced net leverage.
Alight Solutions has planned a conference call for 10 a.m. Eastern Time today to discuss the details of the transaction. Following this call, DA Davidson anticipates providing further commentary later in the week.
The sale to H.I.G. Capital represents a strategic move for Alight, as it seeks to streamline its operations and focus on areas with higher growth potential. The additional share repurchase authorization reflects the company’s confidence in its financial health and commitment to delivering value to its shareholders.
Investors and analysts will be looking forward to the additional insights that DA Davidson will share after the conference call, which may provide a deeper understanding of the transaction’s impact on Alight’s future performance.
