Berenberg lowers SSP target price to 225p following Q4 figures

(Sharecast News) - Berenberg cut its price target on SSP to 225p from 245p on Monday, but reiterated its 'buy' rating on the stock, saying the group delivered resilient fourthquarter earnings despite softer free cash flow and a weaker performance in North America.

Berenberg said SSP posted a solid topline showing in Q4 to September, led again by the UK, with likeforlike growth of 4% matching consensus. Continued optimisation of its North American jointventure model and a lower tax charge helped SSP deliver FY26 earnings per share in line with expectations, extending what Berenberg described as an 18% EPS compound annual growth rate since FY24.

However, Berenberg also noted that negative US passenger trends over the key summer period meant the region underperformed internal forecasts, driving a 4% miss versus FY26 EBIT consensus.

Berenberg noted that AsiaPacific and Eastern Europe & Middle East improved, led by the Gulf region, although knockon effects from the Middle East conflict continued to weigh on AsiaPacific and India. Continental Europe also delivered solid trading.

The German cut its FY26 underlying earnings estimate by 5%, with the downgrade flowing through FY27 and FY28. It said free cash flow of around £70m for FY26 fell short of the prior £100m+ guidance, despite underlying cash generation improving to £140m to £150m. SSP attributed the shortfall to decisions not to draw incremental supplychain financing, faster European restructuring and North American weakness.

Berenberg's sumoftheparts valuation supports the new 225p target, with SSP's core business trading on an 8x FY27 price-to-earnings ratio, a roughly 25% discount to peers that the broker views as unwarranted given highteens EPS growth and sectorleading cash returns.

Reporting by Iain Gilbert at Sharecast.com