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 3.50 to EUR 3.00.

ad pepper media (APM) has reported preliminary Q3 figures, which were below the prior year figures, but roughly met our forecasts. Revenue declined 9% y/y to €5.4m, and EBITDA fell 75% to €101k. Q3 EBITDA was the first positive quarterly EBITDA figure this year and shows the positive effects of initiated cost savings. APM is guiding towards lower Q4 revenue y/y and positive EBITDA. Given weak macroeconomic KPIs in APM’s key markets Germany and UK, we no longer expect a rebound in revenue and earnings in Q4 and have lowered our forecasts. We believe that the main share price driver will be the planned purchase of a >50% stake in solute and the subsequent consolidation of the company. The deal would more than double APM’s revenue and create a leading listed player in performance marketing and digital marketplaces (price comparison). An updated DCF model, which does not yet factor in the planned solute consolidation, yields a new price target of €3.00 (previously: €3.50). We confirm our Buy recommendation.