In key news on UK stocks, S4 Capital PLC (GB:SFOR) shares tumbled nearly 7% on Wednesday after the company reported a steep fall in its profits in 2023 and predicted a grim outlook for this year. The company’s operational EBITDA reached £93.7 million last year, reflecting a 25% decrease on a reported basis and a 36.6% decline on a like-for-like basis. The lower profits reflected the tough macroeconomic conditions, which led to reduced spending by SFOR’s clients.
S4 Capital is a media company specializing in digital advertising and marketing. It was founded by industry veteran Sir Martin Sorrell.
S4 Capital Foresees Another Tough Year
S4 Capital stated that the challenging conditions are likely to continue this year and predicted a similar level of operational EBITDA for 2024. It also anticipates a decrease in like-for-like net revenue, as the clients could remain cautious towards marketing expenditures. Sorrell also highlighted the ongoing concerns over the U.S. elections, which could impact the business outlook.
In 2023, S4 Capital’s like-for-like net revenues declined 4.5% to £873.2 million, marking a reversal from the double-digit growth experienced over the previous four years. The revenue performance was in line with the guidance of a 4% decline provided in January 2024.
Citi analysts stated that while the 2023 results were generally as expected, they observed a more cautious tone in the 2024 guidance, which was not entirely in line with their initial expectations.
What is the Target Price for S4 Capital?
S4 Capital shares have lost over 75% of their value in the last 12 months. Analysts are cautiously optimistic about SFOR stock, acknowledging the company’s prudent business approach for 2024.
According to TipRanks, SFOR stock has been assigned a Moderate Buy consensus rating based on two Buy and two Hold recommendations from analysts. The S4 Capital share price target is 62.5p, which represents a change of 50.6% from the current trading level.
