If you've stuck with S4 Capital PLC (LSE:SFOR) thus far you might as well hang in for the long haul is the message from analysts at Citi.
Shares in Martin Sorrell’s ad vehicle have shed 90% of their value over the past two years as growth has stalled and Citi believes there is not much to do but "wait for the storm to pass".
“During the period from 2020-2022, S4C benefited significantly from its focus on project-based digital transformation work and high level of exposure to the technology sector,” it says.
“Unfortunately, what worked to drive growth in 2020-2021 has started to actively unwind in 2023 and there is not a huge amount that S4C can do about it.”
S4C is not alone in facing these issues, adds Citi, "but it is unusual in the level of exposure to them with 75% or more of the group project-based in nature and almost 50% of revenues from the technology sector".
“For now the market appears to be (not unreasonably) holding the multiple constant on rebased earnings (the latest 20% slide in the shares yesterday is consistent with the long-term downgrade), but we do think there is a pathway to a higher multiple once growth returns hence we stay buyers.”
Shares edged up 0.9% to 75.5p.