• Mark Watson-Mitchell

SThree - more upgraded expectations says Cenkos Securities

Another example of the dislocation between underlying trading and what the stock market is pricing in.


SThree’s Q3/22 update revealed group NFI +19% (against a very strong comparative), with Contract NFI +21% and Permanent +10%.


The group yet again upgraded market expectations, with PBT for the FY22 expected to be at least 7% ahead of consensus.


Productivity continues to be at exceptional levels (+5% YoY in Q3/22), albeit this is expected to reduce as headcount continues to expand.


Overall, another recruitment business delivering strong results with no discernible evidence of a significant slowdown in activity levels – perhaps underlying structural shifts will insulate these stocks more in the event of a downturn?


The shares trade on 9x FY23E PE, 5x EV/EBITDA and c4% yield (based on Factset consensus).


Source: Cenkos Securities

Recent Posts

See All

Hollywood Bowl (BOWL) is too cheap considering the ten-pin bowling operator continues to outperform, says Berenberg. Analyst Owen Shirley retained his ‘buy’ recommendation and target price of 350p on

Ventilation group Volution (FAN) has delivered strong 2022 numbers and Berenberg believes this puts it on track to narrow the valuation gap with its European peers. Analyst Lushanthan Mahendrarajah re