Attractive entry point at DWF, says Berenberg

Citywire Funds Insider - 25.07.2022 this morning reported that DWF looked cheap.

"A pull-back in DWF (DWF) shares offers an ‘attractive entry point’ into the global legal business, according to Berenberg.

Analyst James Bayliss retained his ‘buy’ recommendation and target price of 160p on the stock, which fell 2.5% to 95p on Friday.

The group’s full-year results for the year to April were in line with expectations, with revenue of £350m – up 4% on last year – and profit before tax up 21% at £41m.

‘The group made significant progress over the period,’ said Bayliss.

‘Full-year 2023 trading has been strong to date, and management reiterated its confidence in delivering its medium-term targets.’

Bayliss said DWF is ‘a highly defensive company’ as two-thirds of revenues are uncorrelated with the cycle. However, the stock ‘trades on an 8.6x full-year 2023 price-to-earnings multiple with a 7.5% free cashflow yield’.

‘We believe the valuation offers an attractive entry into an equity story that is already well underway,’ he said."