Broker snap: Peel Hunt upgrades MoneySupermarket.com to 'buy'

Peel Hunt has upgraded its rating for comparison website group MoneySupermarket.com from 'hold' to 'buy', following the recent acquisition of MoneySavingExpert (MSE) earlier this month.The firm acquired the personal finance website from journalist Martin Lewis for a consideration of up to £87m, "a good deal for shareholders", says Peel Hunt analyst Malcolm Morgan."It fits with the group's strategy of developing as an everyday brand to which the consumer chooses to turn. Moreover, for a cash-rich company and given the scale and structure, the deal should be very accretive at the earnings per share (EPS) line," he said."That it also enjoys a strong working relationship with MONY further underpins the sense of the deal."The broker has hiked its full-year pre-tax profit forecast for MoneySupermarket.com from £59.4m to £68.9m, a 16% increase. With EPS estimates being raised by 23% from 8p to 9.8p, the target price is moved from 120p to 130p."The deal saves costs, invests low returning cash and has material tax benefits (we additionally reduce our underlying tax assumption)."BC