We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Skip to main content
  • Register
  • Help
  • Contact us

Liberum ups profit forecasts for Sthree

Mon 13 September 2021 12:59 | A A A

No recommendation

No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.

(Sharecast News) - Liberum has upped both its forecasts and price target for SThree after the specialist recruiter posted a strong set of third-quarter numbers.

In a note published on Monday, the broker said third-quarter net fee income momentum had "accelerated well beyond expectations".

It continued: "The contractor order book is strong - +41% - and SThree looks set to be the first in our coverage universe to breach pre-Covid peak pre-tax profit levels."

Earlier on Monday, SThree had announced that full-year profits were likely to be "significantly above" market consensus following a 29% year-on-year hike in group net fees.

As a result, Liberum has upped its 2021 pre-tax profit estimates by 20%, to £60m, with the risk to forecasts remaining on the upside.

It also increased its 2022 full-year pre-tax profit forecasts, by 19.0%, though the bank noted: "The year-on-year growth in pre-tax profit is very cautiously set, reflecting the likelihood of further investment in the business to support future growth."

The target price was increased to 650p from 580p. Liberum has an unchanged 'buy' recommendation on SThree, which specialises in placing professionals working in the fields of science, technology, engineering and maths.

It concluded: "The momentum in the business is, we think, a function of its focus on the strong recovery and secular growth in stem markets, as well as share gains.

"Momentum is strong, estimates are cautiously set and we continue to see the risks to forecasts to be on the upside. The valuation versus larger peers remains attractive."

As at 1400 BST, shares in SThree were ahead 4% at 572.8p.

    The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.

    More stockbroker tips from ShareCast

    Latest economy and stock market articles