Broker snap: Euromoney lifts profit guidance

25th Sep 2009 12:54

The market has given a big thumbs-up to the trading statement by Euromoney in which the business publisher raised profit guidance for the current year.The group said adjusted pre-tax profit will be no less than £57m for the year, down on last year's £67.3m but ahead of expectations. Singer Capital Markets notes that prior to Friday's statement, market consensus for current year profit before tax was £50.7m.'Assuming FY10 forecasts are raised to [earnings per share of] c35p the stock would trade on P/E 8.8x. With comps [comparative figures] set to get easier and cost action protecting profitability the stock looks on the cheap and could re-rate to 10-12x ahead of a revenue growth recovery,' Singer's Jonathan Barrett reckons.Singer beleives the upbeat trading statement from Euromoney bodes well for sector peers UBM and Informa, 'which have similar product exposures (segment exposures are much wider than ERM [Euromoney] financial focus) and in particular we highlight the strong cost control being delivered across the sector that is offsetting significant revenue declines.'UBM and Informa both trade on a multiple of 10 times Singer's 2010 earnings per share estimates, and 'could rerate further to c12x ahead of revenue growth recovery,' Barrett speculates.