Canaccord Genuity hikes target price on Clarkson

Analysts at Canaccord Genuity hiked their target price on shipping Clarkson from 4,040.0p to 4,325.0p on Thursday, citing cash-backed "quality" earnings per share.

Canaccord Genuity sees full-year pre-tax profits/earnings per share normalising lower year-on-year, with its pre-tax profit estimates upgraded by roughly 10%.

While Canaccord said lower earnings per share were likely, it said there was "significant scope" for dividends per share to progress as shares in the "high return on equity, cash generative, net cash company" offering upside.

"FY22 confirmed again that Clarkson PLC is a leading provider of integrated services, maritime investment banking capabilities, research and green transition advice to the shipping and offshore markets. FY22 also saw margins rise sequentially in all divisions except financial services," said the Canadian bank.

"To us, this suggests that investment in technology and IT is also enabling the company to grow more productively and thus profitably, too. We reiterate 'buy' with a new 4325p target, reflecting cash flow-backed EPS, attractive and well covered >3% dividend yield, and a strong balance sheet. We project dividend progression (>12% CAGR 2022-26E) and see progress as the company invests in new expertise to gain share and protect (and potentially lift) margins."

Reporting by Iain Gilbert at Sharecast.com