In a report released today, Sam Dindol from Stifel Nicolaus maintained a Buy rating on Keystone Law Group Plc (KEYS – Research Report), with a price target of p750.00.
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Sam Dindol’s rating is based on several key factors that indicate a positive outlook for Keystone Law Group Plc. The company’s recent trading update for FY25 suggests that revenue and adjusted profit before tax are expected to surpass market expectations, driven by broad-based client demand and contributions from newly recruited lawyers. This optimistic financial performance is further supported by the slower than anticipated reduction in interest rates, which benefits the company’s interest on client monies.
Furthermore, Keystone’s recruitment strategy has shown positive results, with 50 new principals joining during FY25, resulting in a net increase in the number of principals. This strong recruitment activity, coupled with the company’s capacity to disrupt the UK legal services mid-market, positions Keystone well for future growth. The current valuation, with a one-year forward price-to-earnings ratio of about 18.5x compared to the post-IPO average of approximately 29x, is seen as relatively attractive, justifying the Buy rating and a target price of 750p.