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(Sharecast News) - Berenberg cut its target price on digital publisher LBG Media from 170p to 90p on Wednesday following the group's interim trading update.
Berenberg said LBG's H1 update revealed "continued tough conditions" for its high-margin indirect business, even as the firm's lower-margin direct business - a strategic focus for LBG given its high-quality, more predictable revenue - delivered "excellent growth", almost doubling in the period, demonstrating that recent initiatives were "having the desired effect".
However, the German bank noted that given this mix shift, which has happened faster than management expected, it had opted to decrease its FY26 adjusted underlying earnings forecasts by 14%.
"The shares have sold off by c40% ytd and trade on an FY26 P/E of 10.3x and a free cash flow yield of 5.2% on our new numbers, said Berenberg, which retained its 'buy' rating on the stock. "We decrease our price target to 90p, as we incorporate a target earnings multiple and update our DCF assumptions."
Reporting by Iain Gilbert at Sharecast.com
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