On Friday, Deutsche Bank revised its price target for YouGov PLC (YOU:LN) shares, a global research and data analytics group, reducing it to GBP10.00 from the previous GBP13.75. Despite the downward adjustment, the firm has maintained a "Buy" rating on the stock.
The adjustment follows YouGov's report of lower-than-expected sales bookings for the second half of the fiscal year 2024, with a particularly slower fourth quarter compared to the third. This trend suggests a mixed picture, with some positive momentum being counterbalanced by the company's strategic investments aimed at growth.
YouGov has observed a rising demand for customized research solutions. However, sales in Data Products have been sluggish, and there has been continued pressure in the fast turnaround research services sector. The European market, particularly the DACH region (Germany, Austria, and Switzerland), has been identified as facing significant challenges.
The company's Consumer Panel Service (CPS), which was taken over from GfK, is performing in line with expectations, and integration efforts are moving forward effectively. Nonetheless, due to YouGov's revenue recognition policy, some of the revenue from this service will be accounted for in the fiscal year 2025.
Looking ahead to fiscal year 2025, YouGov's focus will be on optimizing its cost base and strategically investing in growth initiatives. These include upgrading Data Products, enhancing artificial intelligence capabilities, and strengthening the sales and commercial aspects of the business.
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