Rocket Internet saw its shares surge in response to yesterday’s decision by Goldman Sachs to place the German internet group on its list of so-called “conviction buys”, with a price target of €69.
Shares reached €48 yesterday, a 12.81 per cent rise following the investment bank’s note on the firm.
Goldman’s decision marks an impressive turnaround for Rocket, whose share price plunged over 14 per cent within minutes on its stock market debut last month.
The investment bank listed a number of factors in its decision, including Rocket’s impressive track record which boasted a more than 25 times cash-on-cash multiple on invested capital with an 80 per cent success rate on investments.
“Couple this with the achievement of establishing strong leading companies in what many would describe as extremely challenging and complex environments, and we argue that the optionality of some of the ventures ‘hitting a home run’ should not be overlooked,” said Goldman.
Rocket has established a number leading firms in various markets around the world. Goldman said there was even a possibility that Rocket could surpass its target.