- We are lowering our recommendation on Seek to Reduce ahead of the expected launch of Google For Jobs in Australia.
- In our view Seek has the right tools to see off the threat from Google, but in the short term earnings may grow less than expected and sentiment towards the stock may become more cautious.
- Our DCF valuation has declined to A$19.01 per share (from A$20.46 per share). Our target price, set by the DCF and an EV/EBITDA multiple, falls to A$19.07 per share from (A$21.07 per share).
- We like the long-term Seek story, but with a new entrant vying for market share, the risk of under-performance is higher than usual.
Morgans clients can view further analysis in my full report: 'Seek – Getting hotter in the kitchen'. Alternatively, please contact your Morgans adviser or nearest Morgans office for access.
Disclaimer(s): Analyst owns shares.
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