(Sharecast News) - Analysts at Canaccord Genuity slashed their target price on marine engineering services provider James Fisher from 1,375.0p to 625.0p on Thursday but said they remained "chastened buyers" of the stock.
Canaccord said James Fisher had "a challenging 2021", with three profit warnings triggered by a mix of Covid-19 pandemic-related demand slowdown, marine oil and gas slowdowns, specific customer challenges, and "a broader sense of the long-standing particularity of Fisher being lost".
However, while the Canadian bank stated it was shifting forecasts, updating earnings to "more straightened circumstances" and "taking a more cautious view on dividends and cash generation", it also highlighted that the key markets Fisher was exposed to were "starting to improve".
"In particular, we see strong upside from the wave of activity in offshore wind, mostly going into 2023, and in the shorter term from recovering oil and gas markets globally. One early sign of this - the settlement of a dispute with a customer in Mozambique (we believe a group led by Total) - resulted in an extraordinary 30% jump in the share price in the twilight zone of trading between Christmas and New Year," noted the analysts.
"Given the softer markets, and the need to rebuild trust, we are moving our target multiple down to a much more sober 7x/6x 22/23E EV/EBITDA (at the peak of its pomp Fisher used to enjoy a double-digit EBITDA multiple) and our price target moves accordingly, to 625.0p (was 1,375.0p.) We remain chastened BUYers."
James Fisher and Sons (FSJ)16 Apr 2024 11:41
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