Broker tips: Essensys, RWS
By Iain Gilbert
Date: Tuesday 17 Jun 2025
(Sharecast News) - Analysts at Canaccord Genuity initiated coverage on digital experience business Essensys with a 'buy' rating and a 41.0p target price on Tuesday as it said the group was looking to scale with strategics.
Canaccord Genuity said a new Essensys was now emerging, with a new CEO, CFO, simplified go-to-market strategy, and a new, industry-first product, elumo.
While Canaccord said FY25-26 were "likely to be transition years", but noted the expected improvement in revenue mix and gross margins should return Essensys to profitability and cash generation in FY26.
Despite forecasts for declining FY25-26 revenues, Canaccord Genuity believes the route to cash generation to be underpinned by a "significant improvement" in revenue mix, a reduction in costs following the decommissioning of four of its 13 data centres in H125, and a group reorganisation that "should more than halve" operational expenditure by FY25.
"Essensys appears well-positioned to benefit from changes in the commercial real estate market due to the increasing demand for flexible office spaces and premium tenant experiences," said the Canadian bank. "Essensys Platform and elumo provide landlords/operators with new monetisation mechanisms and provide greater insight into utilisation, enabling landlords to better predict churn."
Berenberg has maintained a 'buy' rating for RWS after the company introduced a "compelling" new growth strategy on Tuesday.
Alonside its half-year results, which were already flagged in a trading update in April, the corporate content solutions group delivered a fresh strategy.
This included a new, simplified go-to-market positioning with regional sales teams and a tech-first proposition, and the reorganisation of the business into three units: Generate (content tech and TrainAI); Transform (localisation businesses); and Protect (IP services).
"We think this new, simplified messaging and go-to-market strategy around RWS's value-add proposition should be well received by investors, while also marking impressive progress under new CEO Ben Faes, who joined in January 2025," Berenberg said. "With clear upcoming milestones as the strategy is put into action and new KPIs and medium-term guidance are announced, we think a valuation of 6.9x FY26 P/E and 3.5x FY26 EV/EBITDA offers an attractive opportunity for investors as the equity story rebuilds momentum."
The German broker has a 240.0p target price for the stock, suggesting significant upside from Tuesday's 86.5p level.
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