New Research13 Oct 2020 12:27
Note out yesterday from Pivotal Research, this is the first 2 paragraphs:
BOTTOM LINE: We are initiating coverage of S4 Capital (SFOR.L) with a BUY rating and a PT of £p 500. We view S4 as a unique pure-play digital asset, with an exceptional management team lead by Sir Martin Sorrell as Chairman and Founder. Relative to its ad agency holding company counterparts, we think S4 is increasingly well positioned as the dynamics evolve with regards to client engagement, and the shift continues to online from offline adverting. S4 is arguably the largest global pure-play digital marketing services company. With a digital-only focus, S4 is meeting clients “where they are” across the spectrum of their needs vs. a historical holding company focus on being the “Agency of Record”. S4 Capital has two primary practices: digital content (primarily MediaMonks) and programmatic/data, analytics (primarily MightyHive). We recognize both our price target and SFOR’s valuation are at significant premiums to the holding companies’ multiples, but we believe this is justified given superior growth and long-term prospects