Berenberg lowers target on 'mispriced' Next Fifteen
Analysts at Berenberg lowered their target price on technology and data-driven growth consultancy Next Fifteen from 1,700.0p to 1,450.0p on Tuesday, calling it "a mispriced share".
FTSE AIM 100
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Next 15 Group
385.00p
12:40 24/12/24
Berenberg increased its full-year 2023-24 adjusted underlying earnings and earnings per share estimates by 13%/9% and 9%/6%, respectively, due to Next15's "exceptional trading" in the first half of 2022.
The German bank also noted that Next Fifteen has the highest organic growth, 31% year-on-year in the first half, and the "most robust outlook" in the sector, demonstrated by the consistent upgrades delivered year-to-date.
Despite this, Berenberg said the stock still trades "well below" both its historical range and the sector average.
"We believe the shares are mispriced and reiterate our 'buy' rating. We reduce our price target to 1,450.0p (from 1,700.0p) to account for lower peer multiples and higher WACC," said Berenberg.
"Next15's shares have de-rated to near their lowest levels in ten years (excluding the Covid-19 drawdown) and trade below the sector average on 10.5x FY 2023 P/E, falling to 9.5x in FY 2024."
Reporting by Iain Gilbert at Sharecast.com