Next Fifteen Communications Group PLC (AIM:NFC) shares are materially undervalued, according to Berenberg.
The broker noted the shares have pulled back almost 20% from their all-time high in December 2021 due to general market weakness, meaning they trade on 15 times projected 2023 earnings.
This earnings multiple materially undervalues the marketing group’s strong growth outlook, epitomised by the acceleration in organic growth and the US$400mln five-year transformation contract win early this year.
Berenberg has updated its full-year 2023-24 sales estimates by around 21% to take into account the acquisition of Engine UK, announced last week.
The broker’s underlying earnings (EBITDA) forecasts have been upped by roughly 12-16% for 2023-24 while the earnings per share estimates have been cranked up some 25-35% respectively.
Shares in Next Fifteen currently trade at 1,115p; Berenberg thinks they are worth 1,600p.