LONDON (ShareCast) - (Sharecast News) - Analysts at Canaccord Genuity raised their target price on software and services firm Eckoh from 75.0p to 88.0p on Wednesday, stating the group was "well-positioned" for the 2022 trading year and beyond.
Canaccord said Eckoh had posted revenues in line with market expectations and adjusted underlying earnings "slightly" above the prior, meaning that second-half revenues had increased a low-single-digit percentage and adjusted EBIT was flat.

The Canadian bank views this as "an impressive performance" considering the second half of the prior year was "essentially pre-Covid-19".

Canaccord noted that Eckoh's statement also outlined 2022 full-year guidance for revenue and profit to be comparable with 2021 before "material year-on-year revenue and profit growth" in the 2023 trading year, leading the analysts to reinstate their forecasts for 2022 and 2023 and remain with their 'buy' recommendation.

"Our new target of 88.0p reflects a premium of 15-20% on an EV/sales valuation (annualised to December 2022) vs the UK IT sector (at 5.5x). We believe Eckoh shares should trade at this premium since the non-Covid-19 sales growth and profit margin are both above the sector average," said the analysts.

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