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On Friday, Needham analysts adjusted their outlook on Dun & Bradstreet (NYSE:DNB) shares, reducing the price target from $17.00 to $14.00. Despite the lower target, they maintained a Buy rating on the company’s stock. This decision follows Dun & Bradstreet’s fourth-quarter results, which fell short of Wall Street’s revenue and earnings expectations.
The company’s recent performance was affected by several factors, including disruptions from an ongoing strategic review, the termination of two low-margin partnerships, and some timing-related delays. These elements contributed to a weaker-than-anticipated quarter. Despite challenges, the company maintains impressive gross profit margins of 62.2% and generated $450.6 million in levered free cash flow over the last twelve months. Additionally, the forecast for the fiscal year 2025 was also below the consensus among analysts.
However, Dun & Bradstreet announced plans to provide an update on the strategic review’s results within the first quarter of 2025. Needham analysts believe that the conclusion of this review could potentially lead to a significant transaction or at least reduce distractions for employees. They suggest that either outcome could foster better growth and ultimately benefit the stock.
Despite the immediate need to adjust near-term estimates, Needham’s stance reflects confidence in the intrinsic value of Dun & Bradstreet’s business. The firm’s analysts underscore that the current market valuation does not fully capture Dun & Bradstreet’s worth. The reiterated Buy rating, coupled with the revised price target, indicates Needham’s continued positive outlook for the company’s shares moving forward.
In other recent news, Dun & Bradstreet reported its fourth-quarter 2024 earnings, which fell short of both earnings per share (EPS) and revenue expectations. The company registered a modest revenue growth of less than 1% for the quarter, reaching $632 million, while the full-year revenue for 2024 was $382.002 million, marking a 3% increase. Despite the underwhelming results, Dun & Bradstreet is focusing on strategic initiatives and product innovations, including AI-powered solutions and risk analytics, to drive long-term growth. The company aims to reduce its net leverage ratio to 3.25x by the end of 2025.
Raymond (NSE:RYMD) James analyst Patrick O’Shaughnessy revised the price target for Dun & Bradstreet shares to $14 from $19, maintaining a Strong Buy rating. This decision was influenced by the company’s lackluster fourth-quarter financial performance, which showed negligible organic revenue growth. O’Shaughnessy cited ongoing strategic reviews as potential factors impacting revenue but remained optimistic about the company’s future value creation through mergers and acquisitions, with a decision expected in the first quarter of 2025.
The company’s strategic review process is ongoing, and management has expressed confidence in achieving 5% to 7% organic growth in the medium term. For 2025, Dun & Bradstreet projects revenue between $440 million and $500 million, with adjusted EBITDA guidance set between $955 million and $985 million. Despite recent challenges, the company continues to leverage its global data coverage and AI solutions to strengthen its market position.
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