Berenberg lowers price target on DMGT

Analysts at Berenberg lowered their target price on publisher Daily Mail & General Trust from 850.0p to 770.0p on Friday, stating the group was "struggling to get down to business".

While Berenberg stated that having a portfolio of assets had "many advantages", most notably with regards to damage limitation in a downturn, it added that it was often the case that for every positive story there is a negative one, particularly at times like these.

The German bank remains of the view that DMGT's market-leading brands would enable it to outperform its segments and stated it was also "more positive" on the shape of the recovery for some of the group's more cyclical businesses, such as its events division, which to date had been the key factor in Covid-19-related downgrades.

However, Berenberg said while DMGT's subscription businesses had proved to be extremely resilient so far, it believes a pause in new business over recent months and a slower return to normal levels going forward will result in reduced top-line growth over the next 12-24 months.

This, in addition to a much weaker USD/GBP exchange rate, led the analysts to make significant earnings per share downgrades and lower its target price in the process.

"Nevertheless, we expect growth rates to recover and, while near-term multiples are far from cheap, we continue to see medium-term value within the portfolio," noted Berenberg, which stood by its 'buy' rating on the stock.