Knights Share Price Ends the Week Steeply Lower

Summary:

The Knights share price continues its relentless selloff this Friday as it inches closer to the 120.0p price mark.

The Knights share price is down for the 5th day in a row and looks set to close yet another week in red territory. The decline in the Knights share price has gone on for 7 out of 8 weeks now and was triggered when the company warned of a slower-than-expected growth due to the Omicron COVID-19 variant. At the time, shares dropped more than 45% on the announcement.

The company had blamed staff illness as a detrimental factor that blocked it from benefitting maximally from the reopening of the UK economy. However, it ruled out any losses of clients as a reason for the underperformance. The law firm is expected to announce its full-year results with a pretax profit of 18 million pounds. It forecasts that it will pull 126 million pounds in revenue.

The Knights Group is coming off some high-profile acquisitions performed in 2021. The law firm bought over Langley’s Solicitors for a reported 11.5 million pounds, which will be paid in three tranches in 2023. It also bought Archers Law firm for 5.2million pounds sterling in a cash and stock deal. Two institutional analysts have set a 12-month price target of 165.00p for the Knights’ share price with a HOLD recommendation. This price target gives a 27.9% potential upside in the stock.

The breakdown of the 142.5 support line has allowed for a decline which targets the 120.0 potential support level (100% Fibonacci extension level). If the decline is more extensive, then 106.0 (127.2% Fibonacci extension) and 99.0 (141.4% Fibonacci extension level) will enter the mix as additional targets to the south.

On the flip side, the bulls need to force a price recovery above 142.5 to regain control of the stock’s direction. Clearance of this barrier allows the 159.5 resistance mark (11/19 April highs) to become a new target to the north. A further advance is required before 171.5 (1 April high) becomes available, with 190.5 (22 March high) serving as another northbound target.