Berenberg lowers target price on S&U
By Iain Gilbert
Date: Wednesday 12 Feb 2025
(Sharecast News) - Analysts at Berenberg lowered their target price on finance business S&U from 2,100.0p to 1,700.0p on Wednesday but noted that the group was continuing to navigate a "challenging environment".
S&U's trading update on 11 February revealed the group's loan book reduced in size by 6% year-on-year during the year ended 31 January and by 3% since December, with lower motor finance lending activity partially offset by growth in the group's property bridging business.
Management also highlighted that, while continued headwinds in motor finance will be reflected in H225 profit, it anticipates a recovery in profitability during FY26, with Berenberg noting recent signs of improvement in motor finance lending volumes and collection rates.
The German bank, which has a 'hold' rating on the stock, reduced its earnings per share forecasts by 15% for FY25, 18% for FY26 and 6% for FY27, primarily due to a reduction in its short-term loan growth expectations for S&U's Advantage unit and higher expected impairments in FY25 and FY26.
Reporting by Iain Gilbert at Sharecast.com
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