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Berenberg lowers target price on Ascential following Cannes Lions cancellation

By Iain Gilbert

Date: Monday 06 Apr 2020

Berenberg lowers target price on Ascential following Cannes Lions cancellation

(Sharecast News) - Analysts at Berenberg lowered their target price on exhibition and festivals media specialist Ascential from 300.0p to 240.0p on Monday, stating that with events being "off the table" for the immediate future, so too were earnings.
Berenberg said that Ascential's move to cancel its Cannes Lions festival, which had already been rescheduled from June to October, had already had "a significant impact" on its estimates for the group.

However, the German bank also decided to remove the firm's Money 20/20 events in the US and Europe from its numbers, leading it to adjust estimates for other business activities that would be "severely affected" by Covid-19.

Berenberg highlighted that given the high drop-through margins on the lost revenue, it had now cut its group earnings per share estimates for 2020 down "to almost nothing".

"With significant cuts for 2021 as well, we reduce our price target further to 240p," said the analysts, who also noted that their 'hold' rating on the stock was premised on a recovery to "more normalised levels of business" in 2021.

"The stock is clearly cheap on a FY 2021 P/E of 11.5x versus its two-year forward average multiple since its IPO of c17.6x. This represents a c35% discount."

Berenberg also said that while it removed a dividend from its estimates for Ascential in 2020, it assumes dividends will resume in 2021.

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