Euromoney (ERM) £10.18

Loss to date: 8.4%

Original entry point: Buy at £11.12, 7 October 2021.

Despite nursing an 8.4% loss on our buy recommendation on Euromoney (ERM), we continue to be constructive on the company following particularly strong first-half results (19 May).

The numbers were ahead of expectations from both a revenue and earnings perspective. Full-year trading is expected to be ahead of consensus expectations. The market had anticipated the robust nature of the results with the shares rising 6% over the last month.

Pre-tax profit was 16% higher at £38.6 million and adjusted diluted earnings per share rose 8% to 26.6p. The total dividend increased by 7% to 6.1p per share.

Three key factors drove this outperformance. Subscription growth increased by 8%, its FastMarkets price reporting business accelerated by 17%, and the events arm experienced a 59% rise in revenue as restrictions were lifted.

According to recently upgraded numbers from broker Numis, Euromoney is trading on a current 2022 price to earnings multiple of 18.5, falling to 15.3 in 2023. This looks inexpensive given its belief that earnings will increase from 55p in 2022 to 66.3p in 2023, representing 20.5% growth.

SHARES SAYS: We remain positive on the stock which is heading back in the right direction.

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