Canaccord Genuity lowers target price on Nexteq
By Iain Gilbert
Date: Thursday 31 Oct 2024
(Sharecast News) - Analysts at Canaccord Genuity lowered their target price on business-to-business technology firm Nexteq from 200.0p to 110.0p on Friday, citing short-term headwinds.
Canaccord Genuity said H1 trends had persisted into H2, with Thursday's unplanned trading update confirming a continuation of the trends seen in H1, with customer de-stocking and delayed product rollouts creating a weaker trading environment.
Nexteq now expects FY24 revenues to be "10-12% below" previous expectations, in part offset by continued margin strength and careful cash control, resulting in adjusted pre-tax profits of "no less than $6.0m".
"On our revised estimates, Nexteq trades on a 2025E ex-cashP/E of 12.0x, an EV/EBITDA of 6.3x and a dividend yield of 3.7%. In our view, Nexteq offers a strong balance sheet providing capital allocation optionality, and a stable, cash-generative platform well-placed to recover as the market turns. As such, we maintain our BUY rating but lower our price target to 110p (from 200p) on our revised estimates, based on 10-year average P/E (16x) and EV/EBITDA (10x) multiples," added the Canadian Bank.
Reporting by Iain Gilbert at Sharecast.com
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