BL - BlackLine falls after cut to sell equivalent at BofA even after M&A speculation

• BlackLine ( NASDAQ: BL ) fell 2.9% in premarket trading after it was cut to underperform from neutral at BofA given the company's premium multiple to its peers and M&A premium speculation likely already in the valuation.
• BlackLine's premium valuation "is pricing in all of the potential good news over the NTM, which also includes some potential M&A premium," BofA analyst Koji Ikeda wrote in a note. Akeda cut the BL price target to $64 from $75.
• The BofA cut to a sell equivalent comes after BlackLine ( BL ) rose 3.9% Friday after Betaville speculated that the financial and accounting software company is speculated to be a takeover target. BL may have received some interest from a private equity firm.
• BlackLine ( BL ) shares have gain in recent months partly on potential M&A speculation after private equity tech titan Thoma Bravo purchased Anaplan, according to BofA's Ikeda.
• "We believe that there is likely some M&A premium embedded in BL’s current valuation." Ikeda wrote. "BL shares are currently trading at approximately 10x trailing twelve month revenue, which is the same as the 2022 average PE takeout multiple."
• Ikeda sees potential for 18% downside in BlackLine ( BL ) if the M&A premium is removed from the shares.
• BlackLine ( BL ) short interest is 10.5%.
• BlackLine ( BL ) is scheduled to report Q2 results on Aug. 4.

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