Berenberg cuts target price on Marlowe
By Iain Gilbert
Date: Monday 09 Dec 2024
(Sharecast News) - Analysts at Berenberg slashed their target price on business-critical services and software firm Marlowe from 710.0p to 400.0p on Monday following the group's interim results on 5 December.
Berenberg noted that Marlowe's H1 results covered the transformational divestment of its GRC assets in June and the demerger of its occupational health division in September, with both deals realising shareholder value, as well as leaving "a more focused group" with high earnings quality, derived from non-discretionary, regulatory-driven services of its remaining testing, inspection and certification business.
"Marlowe's H1 results confirm that the TIC business has continued to deliver mid-single-digit organic growth from strong market positions in fire services (where it is the UK's number three player with a 3% market share) and water services (the number one player with a 4% share)," said Berenberg, which reiterated its 'buy' rating on the stock.
The German bank also stated Marlowe's H1 results signified in-line trading, meaning that its continuing operations forecasts remained largely unchanged - save for buyback updates.
Marlowe added that post-demerger, Marlowe trades on a target 9x FY26E enterprise value to underlying earnings multiple, still reflecting a discount to larger, more liquid peers.
Reporting by Iain Gilbert at Sharecast.com
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