Broker tips: Team Internet Group, Centrica, Beazley

18th Mar 2024 16:24

(Sharecast News) - Analysts at Berenberg slightly raised their target price on global internet company Team Internet Group on Monday after the group's full-year results came in "marginally ahead" of numbers provided at the time of its trading update on 29 January.

Berenberg noted that full-year gross revenues were $836.9m, with net revenues of $191.1m and organic growth of 13%. The company's online marketing division grew gross revenues by 14.3% to $657.1m, while the online presence unit saw revenues improve by 17.1% to $179.8m, both on a reported basis.

"These results are 7% ahead of our forecasts for gross sales and 6% ahead for adjusted EBITDA," said Berenberg.

The German bank added that in terms of 2024 outlook, management was confident it will meet current market expectations.

"We update our FY 2023 forecasts to reflect the results and make minimal changes to FY 2024/FY 2025E forecasts," said Berenberg. "We increase our price target to 185p as we roll forward our DCF. The shares are trading on an undemanding 8.2x FY 2024 P/E and a 14% FCF yield."

RBC Capital Markets downgraded British Gas owner Centrica on Monday to 'sector perform' from 'outperform' as it revisited the company's capex opportunities and assessed where it now stands on future growth options.

"Smart meters offer entry into recurring index-linked revenues, however challenges in the UK battery market, low multiples placed on flex gen assets and poor visibility on potential nuclear investment means we are less positive on near term growth options," RBC said.

The bank also said that a lack of near-term catalysts versus some UK peers is a challenge for Centrica in its view, with Drax and SSE for example "likely to benefit from visible touchpoints over the coming months".

RBC said its earnings per share estimates for 2024-2026 sit below Bloomberg consensus and while it sees see value in Centrica over the medium term, it thinks there are better near-term options elsewhere.

The bank lifted its price target on the shares to 145.0p from 140.0p.

Analysts at RBC Capital Markets also hiked their target price on specialist insurance business Beazley from 775.0p to 975.0p on Monday, stating the stock's "re-rating journey starts here".

RBC Capital said Beazley's FY23 update was "a clearing event" for the company, with higher than expected capital returns - and distribution via buybacks - plus its new chief financial officer appointment.

The Canadian bank, which said Beazley remains its 'top pick' in the sector, also pointed out that operational delivery remained strong and so was the company's outlook.

"Yet the shares still trade on just 1.2x 2024e P/B against ROEs of 21%, and with prospect of double-digit yields," said RBC. "We introduce our FY26e forecast, and roll forward our valuation using FY24e BVPS assuming an unchanged P/B multiple of 1.8x giving a new PT of 975p (from 775p)."