(Sharecast News) - Analysts at Berenberg lowered their price target on digital marketing firm Next Fifteen Communications from 680p to 630p on Friday following the group's mixed interim results.
Next Fifteen saw sales grow 11% in the first half of 2020, but organic growth slowed to a "disappointing" -1.3%. However, Berenberg noted that the company's poor performance could be explained by losing a £2m contract with Samsung and a £4m deal with Just Eat.
"While the former stemmed from a decision by Next15, the latter resulted from a change in CEO and senior management leading to a new marketing strategy and partners," said Berenberg, which pointed out that excluding those two client losses, group organic growth was roughly 5%.
Despite the mixed results, the German bank, which reiterated its 'buy' rating on the firm's shares, said underlying trends indicated that Next Fifteen should be able to return to "at least high-single-digit organic growth" in the 2021 trading year.
With margins continuing to expand as well, Berenberg said it remained positive on the medium-term equity story, particularly with the group now trading on just a 12.5x full-year price-to-earnings ratio - a 20% discount to its average historical valuation.
28 Jan 2020 12:33
Next Fifteen Annual Profit To Be Below Guidance Despite Revenue Growth
Next Fifteen Annual Profit To Be Below Guidance Despite Revenue Growth
Read more