Berenberg lowers target price on Midwich
Sharecast
Published Jan 17, 2024 13:41
Updated Jan 17, 2024 14:11
Berenberg lowers target price on Midwich
Sharecast - Berenberg said Midwich's update pointed to "a record performance", despite a continuation of the challenging markets, with revenue up roughly 7% year-on-year at £1.3bn and adjusted pre-tax profits expected to be roughly £50.0m, in line with expectations.
Despite this, Berenberg lowered its earnings per share forecasts for the 2023 and 2024 trading years by 5% and -6%, respectively, reflecting higher-than-expected minority interests in the current year and "introducing conservatism" into its forecasts as market conditions "remain challenged".
Conversely, Midwich's better-than-expected cash generation in 2023 delivered year-end leverage of 1.3x, versus the German bank's 1.5x estimate, signalling "comfortable (and more) firepower" to support the group's M&A strategy.
"All considered, we are encouraged by this morning's update, with management having proved its ability to navigate tough markets," said Berenberg, which reiterated its 'buy' rating on the stock.
Reporting by Iain Gilbert at Sharecast.com
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