Burford Capital (NYSE:BUR) Shares Gap Down After Analyst Downgrade

Key Points

• Wedbush cut Burford's price target from $13 to $6 while keeping an outperform rating, and the shares gapped down—opening at $3.93 after a $4.14 close—on heavy volume.
• Earnings miss: Burford reported EPS of ($0.17) versus $0.37 expected and revenue of $48.8M versus $168.3M expected, reflecting a significant shortfall.
• Mixed analyst and institutional signals: several firms (Zacks, Wall Street Zen, Weiss) downgraded the stock while Bank of America initiated a buy; MarketBeat's consensus is a Hold with a $12 target, and investors like Millennium, Goldman and Jane Street recently increased stakes materially.

Burford Capital Limited (NYSE:BUR - Get Free Report) shares gapped down prior to trading on Monday after Wedbush lowered their price target on the stock from $13.00 to $6.00. The stock had previously closed at $4.14, but opened at $3.93. Wedbush currently has an outperform rating on the stock. Burford Capital shares last traded at $4.0450, with a volume of 3,065,406 shares trading hands.

Other equities analysts also recently issued reports about the company. Zacks Research downgraded Burford Capital from a "hold" rating to a "strong sell" rating in a report on Monday, March 2nd. Wall Street Zen downgraded shares of Burford Capital from a "hold" rating to a "sell" rating in a research report on Sunday, December 21st. Weiss Ratings restated a "sell (d+)" rating on shares of Burford Capital in a report on Friday. Finally, Bank of America started coverage on shares of Burford Capital in a research report on Wednesday, February 18th. They set a "buy" rating on the stock. Three research analysts have rated the stock with a Buy rating and two have issued a Sell rating to the company's stock. According to MarketBeat.com, the company currently has a consensus rating of "Hold" and a consensus price target of $12.00.

Institutional Investors Weigh In On Burford Capital

Several institutional investors and hedge funds have recently modified their holdings of the stock. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its stake in shares of Burford Capital by 4.6% in the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 119,261 shares of the company's stock valued at $1,575,000 after buying an additional 5,229 shares in the last quarter. Millennium Management LLC lifted its position in Burford Capital by 2,967.7% during the 1st quarter. Millennium Management LLC now owns 657,283 shares of the company's stock worth $8,683,000 after acquiring an additional 635,857 shares in the last quarter. Goldman Sachs Group Inc. boosted its holdings in Burford Capital by 14.5% in the 1st quarter. Goldman Sachs Group Inc. now owns 1,206,303 shares of the company's stock worth $15,935,000 after acquiring an additional 152,792 shares during the period. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC boosted its holdings in Burford Capital by 8.4% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 458,562 shares of the company's stock worth $6,058,000 after acquiring an additional 35,541 shares during the period. Finally, Jane Street Group LLC grew its position in Burford Capital by 369.9% in the first quarter. Jane Street Group LLC now owns 201,950 shares of the company's stock valued at $2,667,000 after acquiring an additional 158,973 shares in the last quarter.

Burford Capital Price Performance

The company has a market cap of $932.06 million, a price-to-earnings ratio of 15.62, a P/E/G ratio of 0.11 and a beta of 0.66. The company's 50-day simple moving average is $8.81 and its 200-day simple moving average is $9.67. The company has a debt-to-equity ratio of 0.68, a current ratio of 10.93 and a quick ratio of 10.93.

Burford Capital (NYSE:BUR - Get Free Report) last announced its earnings results on Thursday, February 26th. The company reported ($0.17) earnings per share for the quarter, missing the consensus estimate of $0.37 by ($0.54). The firm had revenue of $48.78 million during the quarter, compared to analysts' expectations of $168.30 million. Burford Capital had a net margin of 15.14% and a return on equity of 1.97%. On average, equities research analysts anticipate that Burford Capital Limited will post 1.28 EPS for the current year.

Burford Capital Announces Dividend

The company also recently disclosed a dividend, which will be paid on Friday, June 12th. Shareholders of record on Friday, May 22nd will be issued a $0.0625 dividend. The ex-dividend date is Friday, May 22nd. This represents a yield of 147.0%. Burford Capital's payout ratio is currently 44.44%.

About Burford Capital

Burford Capital NYSE: BUR is a leading global finance firm that specializes in litigation and arbitration funding, risk management, and asset recovery. The company provides capital to law firms and corporate clients to finance legal fees and associated costs in commercial disputes. In exchange for funding, Burford shares in any awards or settlements, enabling clients to pursue meritorious claims without bearing upfront legal expenses.

Founded in 2009 by Christopher Bogart, Burford was among the first firms to establish a dedicated litigation finance business.

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