Broker tips: Ascential, Reckitt Group
Analysts at Liberum raised their target price on media firm Ascential from 410.0p to 500.0p on Wednesday after the group's digital commerce unit's recent outperformance.
Liberum said Ascential's digital commerce unit outperformed both market and its own expectations, delivering 27% pro-forma revenue growth.
However, Liberum stated that the market reacted negatively to a 9% share placing announced in conjunction with Ascential's results.
"We however are now more bullish, given commentary around a healthy pipeline of digital commerce deals to execute which in the past have optically looked expensive, but given the growth rate of these assets provide material value 2-3 years following acquisition," said the analysts, who also reiterated their 'buy' rating on the stock.
Analysts at Berenberg lowered their target price on consumer goods company Reckitt Group from 8,500.0p to 7,870.0p on Wednesday, stating effects stemming from the Covid-19 pandemic had made their mark on the firm.
Berenberg said "challenging comparables", social mobility and input cost pressures had taken their toll on Reckitt's performance in the second quarter, with like-for-like sales declining 1.0%, missing consensus expectations for an increase of 1.9%.
The German bank noted that the miss was driven by declines in the firm's health and nutrition divisions and below expectation operating margins of 21.6%. Adjusted earnings per share of £1.42 also missed consensus expectations by 2%.
Berenberg, which reiterated its 'buy' rating on the stock, added that Reckitt's results did not invalidate its investment thesis on the firm, which was based on improved execution and 3.9% organic sales growth in the medium term.