Iain Gilbert Sharecast News
29 Oct, 2024 16:03

Berenberg lowers target price on RWS following FY trading update

dl rws holdings plc aim industrials industrial goods and services industrial support services professional business support services logo 20230222
RWS HoldingsSharecast graphic / Josh White

RWS Holdings

133.60p

17:15 29/10/24
-16.08%
-25.60p

Analysts at Berenberg lowered their target price on RWS Holdings from 380.0p to 330.0p on Tuesday following the group's FY24 trading update.

FTSE AIM 100

3,470.83

17:04 29/10/24
n/a
n/a

FTSE AIM 50

3,911.35

17:04 29/10/24
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FTSE AIM All-Share

715.79

17:04 29/10/24
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Support Services

11,184.11

16:49 29/10/24
-0.54%
-60.47

Berenberg said RWS' update confirmed the group had returned to growth in H224, delivering 2% organic constant currency revenue growth in the period. Adjusted pre-tax profits were also expected to be within the range of current consensus expectations for FY24, before FX headwinds.

The German bank, which reiterated its 'buy' rating on the stock, sees this as proof that recent pressures on trading have been either cyclical or market-related and were now easing, with management expecting FY25 to be a further year of organic constant currency growth.

However, unfavourable FX movements were expected to have a significant impact on profits in FY25, leading to a roughly 23% downgrades to Berenberg's earnings forecasts for RWS.

"Despite this, we note that on our new forecasts RWS trades on just 8.2x FY25 P/E and 4.2x EV/EBITDA, which we think is attractive for a business that now appears to have seen a reversal of fortunes notwithstanding FX, and where today's performance should help assuage investor concerns about AI's impact on the industry," said Berenberg.

Reporting by Iain Gilbert at Sharecast.com

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