Investment bank Jefferies remains optimistic about S4 Capital PLC (LSE:SFOR)'s near-term prospects, despite undershooting sales targets in the 2023 financial year.
WPP founder Martin Sorrell’s advertising firm was notably influenced by macroeconomic headwinds, including client caution driven by recession fears and heightened interest rates. This was especially evident among tech clients, from whom S4 Capital derives 43% of its revenue.
The group’s 2024 earnings guidance projects a roughly 11% downgrade to operational EBITDA consensus and a decline in like-for-like net revenue compared to the previous year.
Despite this cautious outlook, Jefferies analysts maintain a buy rating on the stock with a price target of 70p, suggesting an 84% potential upside from current prices.
Shares fell 15% to 38p following Wednesday’s earnings call.