IWG PLC (LSE:IWG) shares fell after Barclays analysts slashed their price target and warned of the major potential effects a recession would have on the flexible office company.
The FTSE 250 company announced half-year results showing strong demand for hybrid working led to a 22% rise in revenues and a huge jump in underlying earnings (EBITDA) from the pandemic-effected period last year.
Chief executive Mark Dixon said “we look forward with cautious optimism to the remainder of 2022".
But Barclays, one of the group's house brokers, saw signs that IWG's post-pandemic bounce was losing momentum.
Highlighting the risk that an economic downturn could cause further delays for the group, the analysts took an axe to their price target for IWG, cutting it to 230p a share from 330p.
IWG’s shares tumbled 17% to 160p in early trading on Tuesday, before recovering to 175p, still a fall over 9%.
Broker Peel Hunt said EBITDA of £123mln is "slightly behind" the £150m in its forecast model at this stage, noting that occupancy in the second quarter of 75.2% was up from 74.5% in the first despite higher pricing, such that both new and embedded prices are above the first quarter of 2020.
"Much depends on the extent of a recessionary environment," the Peel Hunt analysts, but they added that it "looks as though" consensus forecasts for the full year of EBITDA of £381mln "should move little".