Edison Investment Research Limited
London, UK, 18 November 2020
Ebiquity (EBQ): Digital acceleration
CEO Nick Waters, who took over the role in July, has set out his vision for Ebiquity's future strategy at a capital markets day (CMD) presentation. It builds on the group's strong positioning as a genuinely independent adviser to global brands on optimising their marketing ROI. The key to delivering growth momentum and improving earnings quality is clearly in the digital marketing domain, developing embedded products and services to identify and remove wasted spend. No new financial information was disclosed at the CMD and our forecasts are unchanged, but we regard the FY21e to have upside potential, depending on successful implementation.
Ebiquity's shares trade at a discount versus peer group multiples, for which parity indicates a price of 28p, which we would regard as the base case. Successful execution of the plan outlined at the CMD should lead to a faster growing top line and margin expansion, which should act as a catalyst to a re-rating.
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