Why the Altium (ASX:ALU) share price is sinking today but could rebound strongly

The Altium Limited (ASX:ALU) share price us under pressure on Tuesday. Here’s why it is sinking and why it could rebound notably higher…
The post Why the Altium (ASX:ALU) share price is sinking today but could rebound strongly appeared first on The Motley Fool Australia. –

The Altium Limited (ASX: ALU) share price has come under pressure on Tuesday.

In morning trade, the electronic design software company’s shares are down 4% to $28.78.

This compares to a 0.4% decline by the S&P/ASX 200 Index (ASX: XJO) today.

Why is the Altium share price tumbling lower?

Today’s decline appears to have been driven by the release of a broker note out of Citi this morning.

Although the broker has held firm with its buy rating and $33.50 price target, some of its comments appear to have spooked investors and are weighing on the Altium share price.

What did Citi say?

According to the note, the broker points out that Altium has been discounting its platform, which it feels could be an indication of weak trading conditions. As a result, it fears there could be some level of pressure on its second half earnings.

One positive, though, is that Citi’s research shows that website traffic data for its Octopart business have been solid. It also notes a positive shift in preference to its Altium 365 platform.

Nevertheless, despite its aforementioned concerns, the broker remains positive on the company due to its belief that Altium’s downgrade cycle is nearing an end.

Is the Altium share price in the buy zone?

Based on the current Altium share price, Citi’s price target implies potential upside of 16.5% over the next 12 months.

Citi isn’t alone with its buy rating. UBS currently has a buy rating and $34.00 price target on its shares and Credit Suisse has an outperform rating and $35.00 price target.

And even more bullish are the analysts at Morgan Stanley. They currently have an overweight rating and lofty $37.00 price target on its shares.

All four price targets suggest the Altium share price could generate market-beating returns for investors between now and this time next year. Which certainly is food for thought for investors.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of Altium. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Altium (ASX:ALU) share price is sinking today but could rebound strongly appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!