Berenberg cuts target price on YouGov following FY24 update

Berenberg noted that after YouGov's profit warning on 20 June, management updated guidance for FY24, with its performance now expected to be "slightly ahead" of revised guidance at £327.0m-330.0m in revenue and adjusted underlying earnings of £43.0m-46.0m - 1% and 5% ahead of previous guidance, respectively.

Given the relatively lower expectations, YouGov said it would implement a cost-savings programme, which will deliver an annualised saving of £20.0m by FY26, with 70% to be realised in FY25.

In terms of FY25, YouGov expects its performance to be in line with current market expectations. However, the German bank lowered its FY25 revenue and adjusted-EBIT forecasts by 2% and 9%, respectively.

"Shares are trading on a 11.7x FY25E price-to-earnings ratio and a FY25E free cash flow yield of 9.4%. We reduce our price target to 810.0p (from 1200.0p), predominantly reflecting more conservative assumptions to outer year growth and margins. The implied upside to our new price target is circa 85%," said Berenberg, which stood by its 'buy' rating on the stock.

Reporting by Iain Gilbert at Sharecast.com