Learning Technologies Group PLC (AIM:LTG, OTC:LTTHF)’s 131% revenue surge in 2022 was apparently not enough to ferment unbridled optimism among analysts at house broker Peel Hunt today, partially due to a four percentage point tightening of margins and slightly lower-than-expected earnings-per-share (EPS) read.
However, Learning Technologies’ acquisition of GP Strategies in the reporting period was a wise one that should pay off for the group.
“The market has been worried about the performance of GP Strategies post the acquisition, but both the top line and the profitability is growing well for the asset,” analysts observed.
“Going into the new year, the company does expect slower top-line growth, which will impact margins,” noted Peel Hunt, while forward EBIT guidance in the high-single-digit bracket is lower than the mid teens Peel Hunt was expecting.
As a result, Peel Hunt outlined a 13% EPS downgrade, but shares maintained a buy rating with a target price of 200p against a current market valuation 110p representing potential 80% upside.