GCIBerenberg lowers target price on SThree following H1 earnings
Analysts at Berenberg lowered their target price on specialist staffing organisation from 550.0p to 520.0p on Tuesday but said the group's contract focus offered resilience versus peers.
Berenberg said SThree's interim results were well trailed at its update a month ago, with few surprises in today's release. Management has confirmed that FY24 performance remains in line with current expectations.
Looking into FY25, however, Berenberg noted that continued macroeconomic pressures and subdued new business activity means that it now thinks it prudent to forecast both net fees and adjusted pre-tax profits to be flat year-on-year - equating to a approximately 12% downgrade for the latter for FY25.
"While today's downgrade is perhaps unsurprising given recent sector commentary on new placement activity, a circa £90.0m net-cash pile offers optionality, and the group's unique model and positioning in STEM end-markets leaves us encouraged for the future in the context of a 11.4x FY25 P/E (9.1x FY26 P/E)," said the German bank, which reiterated its 'buy' rating on the stock.
Reporting by Iain Gilbert at Sharecast.com
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