Berenberg doubles target price on IWG

Analysts at Berenberg doubled their target price on serviced offices provider IWG from 130p to 260p on Wednesday on the back of the group's first-half results, released earlier in August.

Berenberg said IWG's first-half results, released on 4 August, gave the first full disclosure of the firm's performance during the Covid-19 pandemic, stating the results were "difficult to follow".

However, the German bank said a call with management, rather than the results themselves, had generated the most interest from investors, with particular attention being paid to comments that implied over £185m of savings should come through in 2021's numbers and the revelation that the firm was "in touching distance" of selling at least a portion of its US business to a franchise partner earlier this year.

While Berenberg said it remained "concerned" over the combination of an uncertain recovery and a relatively high valuation, the analysts acknowledged that there were "plenty of reasons" why investors will remain optimistic on the stock through the remainder of the year.

"While we remain more prudent in our forecasts, the savings target shows how volatile IWG’s earnings can be and that a recovery could come more quickly than consensus expects," said Berenberg, which stood by its 'hold' rating on the stock.