Berenberg on raises target price on Alpha FMC following H1 results
By Iain Gilbert
Date: Wednesday 24 Nov 2021
(Sharecast News) - Analysts at Berenberg raised their target price on asset and wealth management industry consultant Alpha Financial Markets Consulting from 420.0p to 470.0p on Wednesday, citing the group's accelerated first-half performance.
Berenberg said Alpha FMC's first-half results, published earlier in the day, showed the company's "best trading period for a number of years", with overall revenue growth accelerating to 44% year-on-year and organic growth increasing 22%.
Due to higher-than-target utilisation levels, Berenberg pointed out that this revenue growth had resulted in 53% underlying earnings growth and 41% earnings per share growth, given the dilution from its accretive placing at the start of the current financial year.
Most impressively, the German bank highlighted that the improved results appeared to reflect broad-based growth, with greater-than-20% growth recorded across each of Alpha's geographies, "strong contributions" from new practices such as insurance and ESG, as well as "material progress" from recent acquisitions Axxsys and Lionpoint.
"As a result of this better-than-expected momentum, and now assuming 20% organic growth over the full-year, we upgrade our EPS forecasts by 6%, and raise our price target to 470.0p," said the analysts, who also reiterated their 'buy' rating on the stock.
"Alpha remains an excellent growth story, with a clear competitive advantage in a structural growth market, thriving in new geographies and service lines while successfully integrating recent acquisitions. We expect this strong performance to be repeated for years to come."
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