Canaccord Genuity lowers target price on Mattioli Woods

Canaccord Genuity reduced its revenue forecasts for Mattioni Woods for 2023-25 by 3-4%, since market uncertainty in the second half continued to result in lower new client numbers year-on-year, as well as having pushed out the timeline for realisations in private equity management.

"We expect ongoing close management of costs, particularly with respect to discretionary spend, to mitigate a lower revenue outlook, resulting in reduction to our adjusted EBITDA forecasts of just 1%," said Canaccord.

However, the Canadian bank stated its valuation methodology remains unchanged, with the analysts ascribing a 20% premium to the long-run peer group one-year forward PE of 14.5x, resulting in a target PE of 17.4x.

"We apply this to our CY23 EPS forecast of 47.7p. Our new TP is therefore 830p (old: 850p). The reduction is due to the slight downgrade in EPS referenced above and overleaf. With 28% upside to our TP and a TSR of 31%," said Canaccord, which also reiterated its 'buy' rating on the stock.

Reporting by Iain Gilbert at Sharecast.com