Canaccord drops ITE target price on currency woes

Analysts at Canaccord Genuity dropped their target price on shares of events organiser ITE on Wednesday, noting that recent progress will likely be masked by the impact of the collapse in emerging markets FX.

Canaccord was encouraged by ITE's 2018 full-year revenues coming in "bang in line" with its forecasts, after a year of significant change. The broker also saw ITE's £300m acquisition of Ascential Events and a recent series of non-core disposals as being well timed.

While ITE has been aggressively reshaping its events portfolio, focusing on fewer, but higher margin/higher growth events, Canaccord said its larger Indian events will benefit from capacity increases in Delhi during 2020, but even this will come at the cost of a material reduction in 2019.

ITE cancelled 30 non-core events and 56 smaller events throughout the year, also dragging on 2019 profits.

With ITE finishing the year with a net debt of £83m, modestly below the broker's projected £86m, and also starting the year with a £113m worth of booked revenues, Canaccord said underlying forecasts looked "well underpinned", but warned that recent FX woes linked to Russia and Turkey had forced it to take another look at its estimates.

All in all, Canaccord lowered its target price on ITE from 95p to 77p but reiterated its 'hold' rating on the firm.