The marketing group is steadily navigating the current coronavirus uncertainties and reassured that trading is the current year is robust, said the broker.
“The 23% fall in the shares since February’s highs, appears to overly discount for the actual reality of this disruption,” it added.
Today’s update also confirmed Cello maintains a “solid” net cash position.
Prior to the pandemic, Cello traded at a forward P/E of 16 times, a rating that is merited according to Cenkos and implies a price of 151p if results in 2020 are similar to the previous year.
The company’s statement today said bookings visibility and new project win rate had been maintained, with the performance of the US arm of the business “particularly robust”.
Cello said the Connect business had performed well in its first quarter of inclusion in the group’s health segment, adding that the division was currently supporting “a number of clients with [coronavirus] related UK and European public health campaigns as well as with US regulatory approvals and FDA filings”.
"Considering the disrupted circumstances in which the group is operating, the board is confident about performance for the second quarter for the Cello Health division, and therefore for the first half of 2020”, the company said.
Looking forward, Cello said it Signal business, which comprised around 16% of net revenues for the first quarter, was likely to see its performance impacted by “more significant [coronavirus] related work delays and cancellations than the Health division” and that action had been taken to reduce costs including salary reductions and furloughing.
Shares rose 4% to 119p.