First Berlin Equity Research has published a research update on ad pepper media International N.V. (ISIN: NL0000238145). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and decreased the price target from EUR 3.00 to EUR 2.80.
ad pepper media (APM) has reported preliminary 2023 figures which were below our forecasts and prior year figures. Net revenue declined 13% y/y to €21.7m and EBITDA was at break-even versus €1.3m in 2022. The main reasons for the decline were sluggish demand, in particular in the traditionally strong Christmas quarter, and €460k in one-off costs for the planned takeover of solute. The planned acquisition of a majority stake in solute is more complex than anticipated and is thus taking longer. Management continues to believe that it will conclude the deal, but the exact timing is currently difficult to predict. As the macroeconomic environment in key markets remains weaker than we expected, we lower our forecasts for 2024 and the following years. We nevertheless believe that APM’s numbers have bottomed out and project 5% topline growth and significantly improved EBITDA (€1.1m) in 2024. An updated DCF model yields a new price target of €2.80 (previously: €3.00). The main share price drivers will be the conclusion of the solute deal and an improving macroeconomic environment. We reiterate our Buy rating.