EOH’s bold approach
Analysts still rate the company a buy, despite the bad news that has been coming from it, writes Marcia Klein
A cascade of surprising announcements within a week, including board changes, a restructure and a poor trading statement, point to a degree of panic at IT company EOH, which is not unsurprising given the rout in its share price. A more than 20% drop on March 14 in response to its trading statement was one in a string that contributed to its share price loss of more than 67% over a year. Those who bought the share five years ago have seen their investment decline by 2%. At this time last year, the Financial Mail was talking about a 400% surge in EOH’s share price since 2012, reflecting a compound annual growth rate of 40%. How the tide has turned. Yet the consensus among analysts is still a buy — perhaps because it sits at an earnings multiple of just 6. So what will it take to put a halt to the rout? For a start, it needs to stop coming out with bad news. Several announcements came though thick and fast recently, starting with the March 12 announcement, without explanation, of Sandi...
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