On Wednesday, Truist Securities adjusted its outlook on FTI Consulting (NYSE:FCN) shares, increasing the price target to $275 from the previous $255, while maintaining a Buy rating on the company's shares. The adjustment comes as Truist Securities anticipates a significant growth trajectory for FTI Consulting, expecting the company to achieve a roughly 10% organic top-line compound annual growth rate (CAGR) over the next decade, which surpasses the 6% consensus estimate for the years 2025 and 2026.
The revised price target is based on a forward-looking valuation framework that takes into account the newly established 2026 estimates. These estimates project sales to reach $4.32 billion and EBITDA to hit $537 million, figures that stand above the consensus of $4.21 billion in sales and $518 million in EBITDA. The bullish stance on the consulting firm's stock is further supported by the company's strategic hiring initiatives.
FTI Consulting is actively accelerating the hiring of Senior Managing Directors, a move that Truist Securities believes will not only strengthen the company's leadership but also attract additional skilled personnel. These "anchor hires" are seen as a key driver for potential share price appreciation, with the expectation that they could contribute to the company's robust growth.
The new stock price target of $275 implies an 18.5x enterprise value to EBITDA (EV/EBITDA) multiple. This valuation reflects confidence in FTI Consulting's future performance and its ability to deliver value to shareholders. Truist Securities' outlook suggests that FTI Consulting's shares could increase fivefold if the company meets the growth and hiring milestones laid out by the firm.
In other recent news, FTI Consulting has reported a significant rise in financial performance. The firm recorded a 12% increase in revenue and a 27% growth in adjusted EBITDA for Q2 2024 compared to the first half of the year. Earnings per share also climbed to $2.34, marking a 33.7% year-over-year increase.
FTI Consulting has also made several key appointments recently. Jeff Wray has been appointed as the Senior Managing Director and Industry Growth and Strategy Leader within its Corporate Finance & Restructuring segment. Juli Saitz has been named as a Senior Managing Director in the firm's Dispute Advisory Services practice, and Nathan Ramsey has been added to the Food, Agriculture & Beverage practice. Additionally, Thomas Thompson and Stuart McIvor have joined the Construction, Projects & Assets practice.
Despite anticipating a seasonal slowdown in the fourth quarter, FTI Consulting has raised its full-year revenue and EPS guidance, indicating a positive growth trajectory. The firm remains committed to its growth initiatives, including strategic investments in senior talent and potential acquisitions. These recent developments demonstrate FTI Consulting's ongoing efforts to enhance its service offerings and strengthen its global presence.
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