The average target price of PHLL.L is 296 and suggests 38% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 320.0. This translates into 50% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 249.7. This suggests 17% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Petershill Partners PLC operates as a general partner solutions investment firm. It provides capital and strategic support to asset managers through minority stake acquisitions. The company was formerly known as Delta Epsilon plc and changed its name to Petershill Partners PLC in September 2, 2021. The company was founded in 2007 and is based in London, the United Kingdom. Petershill Partners PLC operates as a subsidiary of GSAM Holdings LLC.

Petershill Partners PLC

Financial Services

The company pays dividends from time to time. It has paid dividends in less than half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. The company distributes most of its profit as dividends (payout ratio above 75%, a negative factor). It will not be easy to sustain such a high payout ratio. It may also indicate a company’s lack of profitable growth opportunities, which suggests doubtful prospects. On average, the company pays dividends annually. 

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 2ppts and its growth accelerated by 1ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 5.3% in the last 12 months, a decline from 22.0% in FY23. 

Petershill Partners PLC reported a return on equity (RoE) of 6.9% in the last 12 months, down from 35.6% in FY23. The market consensus projects an RoE of 46.4% in FY24, this time above its peers. 

Another important profitability metric, return on assets (RoA), amounted to 5.8% in the last 12 months, a decrease from 29.8% in FY23. The market analysts predict that RoA will be 39.4% in FY24, more robust than its peers in this period. 

In the last 12 months, the return on capital employed (RoCE) declined to 5.8%, below the peers. The consensus estimate for FY24 for RoCE is 10.0%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.7 in the past several years. This ratio implies a good shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

PHLL.L has below average trading liquidity. The average private investor can sell his common position in the stock in a single trading day. Liquidity is usually quite stable and remains extremely favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability, solid return on capital, and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to slow historical revenue growth, excessive margin volatility.

In highly turbulent market conditions, PHLL.L is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, PHLL.L is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from moderate to substantial. 

Considering past and projected metrics, the stock is 'cheaper' than its peers. In particular, the stock is underpriced on P/E, of fair value on EV/EBITDA, undervalued on P/FCF. 

Petershill Partners PLC

£ 220.5

3

Petershill Partners PLC

£ 220.5

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

£ 220.5

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