In a note, initiating coverage, analyst William Larwood at Berenberg has come cleanly out with a ‘Buy’ recommendation, and a Price Objective of 825p a share, compared to the current 653p.
The publishing group’s shares have already risen around 70% over the last year.
However, Larwood concludes that the group is much more diversified than appreciated and that its balanced model across division, genre, format and geography has driven a 12% 10-year revenue compound annual growth rate, alongside consistent, and growing, double-digit pre-tax earnings margins.
He also noted that the group has had two decades of dividend growth.
Larwood stated that:
A month ago, I asked whether it was time for investors in the stock to take some profits?
On the Interim Results, the shares went up to 766p; they have since dropped back to 653p.
So, the new question is – should we follow Larwood’s advice at Berenberg, as he looks for a run up to 825p.
(Profile 28.02.19 @ 231p set a Target Price of 257p*)
(Profile 27.03.19 @ 238p set a Target Price of 300p*)
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