Panmure Liberum has reduced its price target for Kooth PLC (AIM:KOO) from 500p to 375p, citing recent contract challenges in the United States as a key factor.
Kooth, a digital mental health provider, recently lost a major contract in Pennsylvania after failing to secure necessary stakeholder support.
This unexpected contract termination has put Kooth’s American expansion strategy under pressure, affecting investor confidence, the broker said.
Additionally, its contract in California faced negative media coverage and potential political hurdles, which heightened concerns, Panmure Liberum added.
Despite these setbacks, its analysts maintain a positive long-term view of Kooth’s business model but note increased risk in the US market due to political sensitivities around youth mental health.
PL retains its 'buy' recommendation, while the price target is more than double the current price of 158p (down 1.2% on the day).