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Berenberg lowers target price on S&U, keeps 'top of the range' numbers
(Sharecast News) - Analysts at Berenberg lowered their target price on motor finance and bridging lender S&U from 2,350p to 2,200p on Tuesday following the group's FY26 results. Berenberg said the results showed S&U's loan book had been rebuilt, driven by its Advantage business, while its Aspen unit also continued to grow.
The German bank noted that wile revenues were soft, so were impairments, meaning pre-tax profits were in line with consensus estimates.
In terms of outlook, Berenberg expects S&U to see "a strong rebound in lending" as the firm returns to serving its traditional customers following a period of regulatory uncertainty.
"While this reduces our EPS estimate by c10% for FY27, our numbers are top of the range, and we would expect a smaller cut to consensus," said Berenberg, which reiterated its 'hold' rating on the stock.
Berenberg added that although finance costs also increase in outer years, S&U was also engaged in a major securitisation project, which it reckons should enjoy better terms than the firm's current revolving credit facility.
Reporting by Iain Gilbert at Sharecast.com
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