Jefferies sees downside risk at Auction Technology Group

Jefferies has kicked off coverage of Auction Technology Group with an 'underperform' rating, saying it sees continued downward pressure on consensus forecasts.

The broker has given the stock a target price of just 380p, compared with Wednesday's closing price of 445p.

Jefferies said that total hammer value (THV) declines have continued to accelerate in the second half ended 30 September, worsening across both the Arts and Antiques division (A&A) and Industrial and Commercial (I&C).

Meanwhile, the broker said that "unfavourable characteristics" of the I&C market suggest that the company will struggle to expand take rates (marketplace revenue as a percentage of total auction sales values) in line with others in the sector.

"We expect negative THV trends to become more visible on 28 Nov (FY24 results) and FY25 guidance to come in lower than expected. A lack of progress on marketing, payments and shipping should become increasingly apparent over the next 12 months, as progress fails to meet expectations," Jefferies said.

The stock was down nearly 7% at 415p by 1100 GMT.