MS cuts rating on Enfusion stock after Clearwater’s acquisition bid

Investing.com -- Morgan Stanley downgraded Enfusion Inc (NYSE: ENFN) stock to "Equal-weight" from "Overweight" following Clearwater Analytics' proposed $1.5 billion acquisition at $11.25 per share.

With the bid accelerating value realization, Morgan Stanley (NYSE: MS) raised its price target by 25 cents to $11.25, in line with the offer price.

“One of the central tenets of our historical Overweight thesis was predicated on untapped strategic value that resulted in minimal absolute downside and an asymmetric risk-reward. With CWAN's proposed acquisition of Enfusion at $11.25, strategic value has been unlocked and we step to the sidelines,” Morgan Stanley analyst wrote.

The offer represents a 13% premium to Enfusion's most recent closing price and a 32% premium to its September 2024 levels.

Morgan Stanley noted that the deal unlocks strategic value for shareholders and addresses longstanding challenges such as limited stock float and a high concentration of startup hedge fund clients.

MS added it had long held the view on Enfusion as a strategically valuable asset, burdened by limited public float.

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