Canaccord Genuity slightly lowers target price on 'buy' rated Begbies Traynor

Analysts at Canaccord Genuity slightly lowered their target price on business rescue and recovery specialist Begbies Traynor on Thursday but retained its 'buy' rating on the group.

Canaccord pointed out that over the last five trading years, Begbies earnings growth had "materially exceeded" the growth in the UK insolvency market.

The Canadian broker believes this is a function of both organic and inorganic growth driving market share by volume in its business recovery and advisory unit, coupled with a trend towards winning higher fee mandates and organic and acquired growth in the property services division.

"We expect BEG's strategy to remain a combination of investing in organic and inorganic growth going forward," said the analysts.

Between 2020-2023, Canaccord expects an earnings per share compound annual growth rate of 16.2%, to which it sees upside risk if there was to be a quicker recovery in property services than it had forecast following lockdown and the insolvency market reaches 2009 levels and accretive acquisitions are made.

The implied upside to our new 122p target price, down from 128p, was 22%, with the total shareholder return was projected be 25%.