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14 Jan, 2022 13:53

Berenberg hikes target price on John Wood

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Wood GroupSharecast graphic / Josh White

Analysts at Berenberg raised their target price on oilfield services provider John Wood Group from 250.0p to 300.0p on Friday after the firm released a full-year trading statement indicating both revenues and adjusted underlying earnings were in line with prior guidance and consensus.

More importantly, Berenberg stated John Wood had confirmed that it will push ahead with the sale of its Built Environment consulting business, a move it expects to conclude in the second quarter of 2022.

"We believe, based on the valuation of peers, that the business could be sold for an attractive multiple (12-18x EV/EBITDA gives a range of $1.9bn-2.7bn). This could leave the group net cash, attractively valued and able to re-start a dividend at a point when the underlying business is inflecting higher," said the analysts.

The German bank, which reiterated its 'buy' rating on the stock, adjusted its estimates for John Wood's update, with earnings per share estimates now seen "marginally improved" for 2021 and increased 8% and 5% for 2022 and 2023, respectively, due mainly to lower depreciation, depletion, and amortisation.


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Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news articles and we may not share the views of the author or publisher.

We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.