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Investing.com - Berenberg has assumed coverage on M&C Saatchi PLC (LON:SAA) with a Buy rating and a price target of GBP2.00, down from the previous target of GBP2.40.
The London-based advertising company reported its H1 2025 results, revealing a downgrade in its like-for-like revenue guidance to a mid-single digit decline due to client caution in Q2 following what the company referred to as "US President Donald Trump’s liberation day."
Despite the revenue challenges, M&C Saatchi expects its full-year 2025 EBIT (earnings before interest and taxes) to remain in line with last year’s figures, attributed to swift cost-cutting measures implemented by management.
Berenberg noted that the market had likely anticipated some weakness, as evidenced by the stock’s 13% derating over the past three months, but maintained its positive outlook based on efficiency improvements made by the new management team.
The research firm highlighted M&C Saatchi’s focus on higher-growth, higher-margin divisions and its improving free cash flow profile, noting the stock currently trades at a FY25 estimated P/E of 9.4x and offers a free cash flow yield of 5.5% based on Berenberg’s revised projections.
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