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On Tuesday, RBC Capital Markets adjusted its outlook on Auction Technology Group (LON:ATG:LN), reducing the price target from GBP5.40 to GBP5.00, while maintaining a Sector Perform rating on the company’s shares. The adjustment follows ATG’s latest financial performance, which showed revenue figures meeting the first half year estimates but with a lower profit margin than anticipated.
ATG’s recent key performance indicators (KPIs) presented a mixed picture, with some improvements observed. However, in the first half of 2025 compared to the second half of 2024, the company experienced a decrease in the traded share of Total (EPA:TTEF) Hammer Value (THV) in its Industrial & Commercial (I&C) segment, as well as a reduced share of transactions in its Arts & Antiques (A&A) business. Both sectors are anticipated to be growth areas as their respective end markets recover.
The analyst from RBC Capital highlighted the importance of positive movements in at least two of the company’s three main metrics—THV, conversion rate, and take rate—to adopt a more optimistic stance on the stock. Given the current trajectory of these indicators, RBC has revised its forecasts downward for Auction Technology Group.
In the analyst’s own words: "ATG delivered revenue in line with H1 estimates at a lower margin than expected, whilst the KPI evolution was mixed. There were some improvements, but in H125 versus H224, the group’s marketplaces traded a lower share of THV in I&C and took a smaller share of the transaction in A&A, both expected to be growth drivers as end markets return. We maintain our position that 2 of THV, conversion rate and take rate need to be moving in the right direction to be more constructive. We reduce our forecasts, with a lowered target price of 500p from 540p."
The revised price target of 500p, down from the previous target of 540p, reflects the challenges ATG faces in improving its key metrics to drive growth. The company’s performance and the adjustments to the financial outlook will be closely watched by investors as ATG strives to strengthen its position in the market.
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