Sanderson Design will release interims on Wednesday and markets are pricing in downgrades. However, alongside a significant overseas growth opportunity, a growing pipeline of licensing opportunities is expected to underpin trading in H2 and beyond. The Board’s expectations for full year profits therefore remained unchanged at the time of the pre-close in August. If forecasts are sustained (assumptions look fair), the valuation is far too cheap and detached from any near peers, on just 8x P/E (6x ex cash) to Jan’24 or 3x EV/EBITDA to Jan’25. Compared to our 210p target price, the TSR on offer is >100%. We therefore rate the shares a Buy.
