Cherry: Preliminary Q3 results and lowered guidance. Right and wrong in our estimates

Research Note

2017-11-02

07:56

After the markets closed on November the 1st, Cherry released a revised guidance for the full year of 2017 and preliminary sales and result for Q3. For the full year, the Group adjusts the income guidance by -12% and EBITDA by -16%. On the same day as the announcement, we published our Q3 preview. On the whole, we were right about the fact that Performance-Based Marketing (PBM) is performing exceptionally well, but wrong regarding the temporary glitch within ComeOn! After we have seen the full numbers for Q3, we will have to adjust our estimates for the Group due to the weak performance of Cherry’s largest segment, but also increase the long-term margin assumptions for PBM. However, the market will most likely only focus on the negative news regarding ComeOn! and put pressure on the share, at least in the short.

KL

Kristoffer Lindström

Disclosures and disclaimers

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