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On Tuesday, Jefferies analyst Giles Thorne adjusted the price target for Schibsted ASA (SCHA:NO) (OTC: SBBTF) shares, decreasing it to NOK 370 from the previous NOK 395, while reiterating a Buy rating on the stock. The revision reflects lowered forecasts for the company’s future revenues and earnings before interest, taxes, depreciation, and amortization (EBITDA).
Thorne noted that Schibsted’s group revenue and EBITDA projections for the fiscal years 2025 to 2027 have been moderately reduced by 1.5% to 2.0% and significantly by -7.0% to -16.7%, respectively. The ReCommerce segment, in particular, is expected to see a slower progression towards a positive EBITDA margin, with an anticipated loss of NOK 0.2 billion in fiscal year 2025, a revision from the previously estimated loss of NOK 0.1 billion.
The Mobility and Real Estate divisions of Schibsted have also seen adjustments, with reduced revenue growth rates due to a deceleration in advertising and classified revenues. Additionally, EBITDA margins for fiscal year 2025 have been scaled back, aligning with management’s statements that this period will be a transition year for the entire group.
Notably, the closure of the jobs vertical in Sweden and Finland has impacted revenues negatively, although it is expected to have a neutral effect on the fiscal year 2025 EBITDA. Despite these revisions, Thorne affirmed that the firm’s estimates remain consistent with Schibsted’s medium-term growth and margin targets.
The valuation adjustment is driven by a discounted cash flow (DCF) analysis, which now sets the price target at NOK 370. Thorne pointed out that Schibsted’s stock is currently trading at the lower end of the price-to-earnings growth (PEG) ratio range for fiscal years 2025-2028, at 1.5 times, compared to the 2.0 times average of its European peers.
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