Source: Sharecast
Ashtead Technology posted its H1 trading update on Thursday, with the firm ultimately guiding for FY25 adjusted underlying earnings that were "modestly below" previous expectations following lower-than-expected revenues.
However, Bernberg noted that shares slumped roughly 23% on the day as investors focussed on the slowing of organic growth, macro challenges ahead for FY26 and technical factors.
"We update our numbers for the release, resulting in no change in EPS for FY25, but with 8-10% cuts for the rest of the forecast period – primarily due to lower revenue and organic growth assumptions," said Berenberg, which reiterated its 'buy' rating on the stock.
"We are, of course, cognisant of the various macro headwinds left to navigate, but would also note that the adjusted EBITDA expected in FY25 is c4x larger than that reported close to the IPO in FY21 – with the business not having raised equity in that period, and the stock is now trading on 4.4x FY26 EBITDA."
Citi downgraded its stance on Barclays on Friday as it took a look at European banks and exchanges.
"Industry wallet trends remain encouraging, but we see European wholesale banks reporting slower trading revenue growth versus US peers, due to business & regional mix, market share losses (especially at Deutsche Bank), negative FX translation (especially Barclays) and LCM marks (UBS)," it said.
Citi downgraded Barclays to 'neutral' from 'buy' but lifted its price target on the stock to 366.0p from 360.0p following the run-up in the shares.
Softcat slumped on Friday as JPMorgan Cazenove placed its shares on 'negative catalyst watch' ahead of FY25 results.
Having analysed the impact that large deals may have on Softcat's near-term financial profile, the bank said it concluded that consensus may not reflect the extent to which large deals have contributed to FY25 EBIT growth.
It said that with around 12% 'underlying' EBIT growth expected through FY26, expectations could be elevated, especially if large deal momentum slows. These deals are lumpy and concentrated mostly in a single large customer, JPM said.
"Our discussions with investors also suggest to us that this risk is not reflected within buyside expectations to a material extent," the bank said. "Softcat's elevated relative valuation would similarly indicate that expectations are high, given recent earnings upgrades.
However, JPM said its analysis indicates that FY26 consensus could see downside of low mid-single digit percentages if one-off large deals in FY25 do not repeat through FY26 and said it sees risk that the FY26 guidance could crystallise this downside.