SThree PLC (LSE:STEM) reported strong third quarter results today with net fee income up 22.9% with continued year-on-year growth in its three largest countries, with Germany up 13%, USA up 9% and the Netherlands up 36%.
Broker Liberum said the recruitment group continues to surprise on the upside with the net fee income growth well ahead of its 8% estimate.
As a result, Liberum raised its price target to 725p from 675p and raised profit forecasts as well adding all markets continue to perform strongly while costs remain in line with guidance.
The broker upped its full year 2022 adjusted pre-tax profit estimates by 7% to reflect management guidance although it believes these could prove cautious given the contractor order book at the end of quarter three was up 24%.
Liberum said although the market is fearful of a slowdown this is more than priced in and takes no account of the longer term secular growth potential within STEM markets.
The broker reiterated its buy rating and shares rose 4% after the news.