Canaccord ups price target for Cerillion after strong first half

(Sharecast News) - Canaccord Genuity has upped its price target on Cerillion after the software specialist enjoyed a record first half.
The Aim-listed firm said the previous six months had been its "strongest ever" trading period, and first-half revenues were now set to come in around £12.8m, a 25% increase year-on-year. Adjusted earnings before interest, tax, depreciation and amortisation were seen jumping 77% to £4.8m.

Canaccord, which has a 'buy' recommendation on the stock, noted: "This increase is organic and we believe is a function of several factors, including the group's improving skill at winning larger ticket contracts, the Nokia partnership now bearing fruit and the increasing focus of operators on 5G communications.

"The first half specifically has benefited from the customer implementation projects running to plan, and strong demand from existing customers."

Canaccord also said that it had upgraded its full-year figures by around 8% following the update, and was revising its target price from 520.0p to 575.0p, in line with that.

"We are comfortable with a target price corresponding to December 2021 PE of 39x versus the UK IT sector average at 33x, or a 15% to 20% premium."

As at 1330 GMT, shares in Cerillion were ahead 5% at 542.6p.