Berenberg raises target price on IWG
Analysts at Berenberg upped their target price on serviced offices provider IWG from 350.0p to 425.0p on Friday, stating the group's "capital-light model" looked set to transform its profit and loss standing.
Berenberg said IWG's third-quarter results had shown a continuation of trends observed since the start of the Covid-19 pandemic.
"While cash generation remains impressively strong, revenue performance is worsening progressively, as more customers have reached the end of their contracts while under lockdown, and 'transactional' revenues have been weak with fewer customers actually currently office-based," said the German bank.
However, Berenberg highlighted that despite "near-term pressures", IWG's shares had risen by 40% since the start of the month, principally due to the news of Pfizer’s vaccine raising investor hopes that the company can quickly recover to prior levels of occupancy and profits.
"In our view, this recovery will come at some point in 2021. Combined with the ongoing shift to a capital-light model, a growing net cash position and the potential for transformational master-franchise (MFA) deals, there is plenty of potential excitement ahead for IWG," concluded Berenberg, which also reiterated its 'buy' rating on the stock.