In a report released today, Sam Dindol from Stifel Nicolaus upgraded Knights Group Holdings Plc (KGH – Research Report) to a Buy, with a price target of p170.00.
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Sam Dindol has given his Buy rating due to a combination of factors, primarily driven by Knights Group Holdings Plc’s strategic acquisition of IBB Law LLP. This acquisition significantly enhances Knights’ presence in the South East of England, expanding its service offerings and providing a platform for future organic growth. The acquisition aligns with the company’s strategy of focusing on fewer, larger deals, which is seen as a positive shift under the new leadership.
Financially, the deal is expected to improve Knights’ profitability, with IBB Law LLP contributing a higher profit margin post-integration. Additionally, the company’s valuation remains attractive, with a forecasted P/E ratio that suggests potential for price appreciation. The broader market environment also appears supportive, with other UK-listed professional services firms experiencing estimate upgrades, indicating potential upside risks to Knights’ near-term earnings forecasts. These factors collectively underpin the Buy rating, with a target price set at 170p.