SEEK (SEK) - Demand slows in Asia

SEEK provides online employment marketplace services in Australia, South East Asia, New Zealand, the United Kingdom, Europe, and internationally. In addition, the company holds a portfolio of investments in the human capital management industry. SEEK was incorporated in 1997 and is headquartered in Melbourne, Australia.

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Ord Minnett has reviewed its FY25 forecasts and the corresponding consensus estimates for online classified advertising companies under coverage. As a result, our EPS estimates for SEEK (SEK) fall by 4% for FY25 and by 7% in both FY26 and FY27.

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Ord Minnett’s forecasts for operating earnings (EBITDA) have been reduced as we incorporate a change in classification of some capital expenditure to operating expenditure by the online jobs portal and a downgrade to our assumptions for revenue growth in its Asian operations amid weaker listings. Our FY25 EBITDA estimate matches market expectations. Our first-half FY25 forecast EBITDA is circa 5% below consensus, however, as we see a stronger weighting to the second half as cost savings compensate for what we expect to be a largely flat revenue outcome. We maintain our target price of $27.00 on SEEK but raise our recommendation to Buy from Accumulate on valuation grounds.

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