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Alpha FMC is essential to its clients, says Berenberg

Analysts raised the target price and expect "many more" upgrades over the next few years as Alpha plans to double in size

Alpha Financial Markets Consulting PLC - Alpha FMC is essential to its clients, says Berenberg

Alpha Financial Markets Consulting PLC (LON:AFM) got a price target raise by Berenberg in light of a “continued impressive performance”.

The consultant said earlier on Thursday that underlying profits (EBITDA) for the year to March will be at the upper end of market forecasts after trading improved steadily during the second half.

READ: Alpha FMC results to be at upper end of forecasts after pick-up in trading

Albeit the update did not give much detail, Berenberg increased its EBITDA forecast by 5% to £21mln.

“Ironically, this leaves our forecasts slightly ahead of the level we had had forecast prior to the COVID-19 pandemic, before we reduced estimates assuming that Alpha would see a fall in new business wins through the last year as clients cut back on “discretionary” consulting projects,” analysts commented.

“Clearly, this has not been the case; Alpha has been materially more resilient than we expected and looks set to deliver another year of double-digit top-line growth and high cash generation.”

The German bank increased the target price to 310p from 280p previously, stating that Alpha’s £34mln net cash position and highly cash-generative business model will support future growth investments.

Analysts added that they expect many more upgrades to forecasts over the next few years as Alpha plans to double in size.

“We believe these results are an excellent example of the essential nature of Alpha’s services to its clients and a greater level of resilience than even we had expected,” they noted.

Shares advanced 4% to 269.4p on Thursday afternoon.

Quick facts: Alpha Financial Markets Consulting PLC

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Price: 356.95 GBX

Market Cap: £422.05 m

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