- Future
- 01 April 2026 14:57:57
Source: Sharecast
"After yesterday's warning, we lower our FY26E adjusted earnings per share by 20% and our FY28E by 36%," Barclays said.
"It is true that only 16% of revenues are causing the hit to profit and those should reduce in the mix over time. But there is low visibility on those revenue streams and both AI and macro can impact them."
The bank said Future had been managing pretty well on this year's numbers and it has been one of the least expensive names Barclays covers for a while now. However, Tuesday’s warning about the traffic impacts on digital advertising and e-commerce commissions - which combined account for around 16% of group revenue - and the high margin/high drop-through of those revenue streams have led the bank to cut its EPS and adjusted EBITDA estimates.
"This also lowers confidence beyond FY26E and we lower FY28E EBITDA/EPS by 28/36%, respectively," it said.
"When we see what this implies for our DCF (retaining a 15% WACC and 1% terminal growth), it approaches last night's closing share price: our DCF-driven price target is now 285p (from 640p)."
Regardless of Tuesday’s share price slump, Barclays said it was difficult to use valuation as an argument to justify an ‘overweight’ rating any longer.
"Our previous key catalyst of just delivering in FY26 may be easier to believe now that the expectations are lower, but structural forces are impacting revenue growth, and we do not know where those will go next.
"There are also UK/US cyclical risks to consider, which were not the focus of management's reduction in guidance."
At 1455 BST, the shares were down 5.8% at 279.55p.