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Market seems to have forgotten the Citi 220p target (which had a 30% conservative discount added) therefore hopefully in the coming days will forget about Barclays but it's the THG sp so who knows.

Yes well it's also a hell of a downgrade considering THG has only grown larger since then and has more than enough cash to weather the inflation, especially considering whey prices have now actually dropped back to where they were in March/April 2021 when THG sp was 650p.

This is the same "house broker" that in September said THG Beauty could be worth £4 billion. Now they are saying the whole of THG is worth £1.3 billion. They seem to adjust their opinions based on where the sp is.

https://northernfinancialreview.com/2021/09/16/thg-confirms-beauty-spinoff-h1-revenue-tops-958m/

Agree jgallagh, also looking further at Lord Allen, at Balfour Beatty he bought £243,000 worth of shares after 10 months as chairman whereas with THG he bought £1 million worth of shares after 3 months as chairman.

Thought I'd re-post the page 1 of the 62 page Citi broker note Xavik posted:

A Beast in Beauty
CITI'S TAKE
Amid M&A newsflow, commodities/FX driven downgrades, corporate
governance debates and questions over THG Ingenuity, we feel the market
is underestimating the value of THG Beauty division, which is a very strong
player in a very attractive market and, alone, could make up for the total
valuation of the company. Following a period of restriction we are resuming
coverage with a Buy Rating, targeting 220p (c. 200% upside).
A Beast in Beauty — We assess the strategic dynamics of the Beauty online retail
market and we find a very competitive environment where THG Beauty stands out,
with the best assortment in the market at the best price. Beauty brands’ push for more
Direct-to-consumer could imply more 3P (Third-Party) distribution going forward.
Even under this scenario, which should improve margins and lower the capital
intensity of the business, we’d expect THG Beauty to remain a leader, thanks to its
strong relationship with beauty brands and logistics capabilities.
Negative newsflow in the rear view mirror? — THG shares are down > 80% over
the last 12months amid a tech/growth market sell-off and further penalized by
commodities (whey) and currencies (GBP/JPY) driven downgrades. With whey prices
and JPY starting to move in the right direction, we expect gross margin recovery to
drive back margins normalization to 9% by FY25e. In addition, the recent appointment
of a new non-executive Chairman should ease concerns on corporate governance.
Mark-to-market drives 220p TP- c.200% upside — We think the recent M&A
interest in THG highlights the clear value in the shares. Applying peer group multiples
and conservatively overlaying a 30% discount, we derive a SOTP-based target price
of 220p (c. 200% upside, vs 250p before), representing 1.2x FY23E EV/Sales. In our
bull case, analyzing the potential impact of THG’s divisional separation exercise and
considering our view of normalized/FY25E divisional FCF, our DCF-based SOTP
derives 600p/share. Our SOTP implies 2.0x FY23E EV/Sales for Beauty, 2.1x for
Nutrition and 3.1x for Ingenuity, [with the internal separation exercise improving the
capital efficiency of both Beauty and Nutrition]

That's why I said post-IPO golden but obviously agree overall. You would think the market would be able to look further ahead to price in future profits/cash flow as it's fairly clear THG have the cash to get there. Does the market really think it would be impossible for THG to generate a profit from online beauty/nutrition if that became their focus? Market seems to ignore the 22-25% predicted revenue growth this year, growth is still the THG focus.
They did say at last results cash-flow neutral next year - "We're expecting to be cash flow neutral next year at the free cash flow basis. Obviously, the operating cash flow, we should be very cash generative, but with all of the bits on top. So next year, we should be somewhere neutral with cash generation kicking in at the free cash flow level there afterwards."
That sounds a lot quicker than Ocado who are predicting to be cash flow positive in 4-6 years but still get a £6.26 billion MC currently.

The soft-bank equity raise a year ago brought THG around £745 million. Current market cap is £933 million, only £190 million more that this. So the whole of post-IPO THG from 14 months back in May before the soft-bank equity raise arguably valued at £190 million.
That's ignoring they also have £536 million in cash (though also £490 million debt but it doesn't mature until December 2026).

It's coz google seems to have a glitch today where the charts think every prior close for every share was 0.

Wonder what happened to "Reasoned thinker" (might be getting the same wrong). He had the thread about the investment banker godson but then it seemed to be removed. Didn't even know it was possible to delete a thread, so presumably must have been done via site admin?

I remember seeing someone in the times comments wondering if THG were double counting their revenue in terms of intra group sales such as counting sales from Bentley Labs to THG as a third party sale, which obviously is all taken out at group accounting. Some of the FUD is of a very poor standard.

Lol Spill the tea they aren't double counted...the ingenuity third party revenues are given as "ingenuity commerce" which obviously gives lower figures.

I wouldn't normally trust a twitter user either but he did "come on the scene" by posting something like "hearing some very interesting things about THG in the city" and then the next day the betaville take-over rumours came in. Could have been luck of-course, but seemed too good timing.

Was there any consensus on which whey price to track? It's just according to this the fall since April has been so steep that whey is now currently cheaper than it was in March 2021 when the THG sp was 650p.
https://www.clal.it/en/index.php?section=siero_olanda

"Insisting the board was 'focused on delivering the strategy' set out at the time of the float, Allen said: 'I would suggest shareholders not be concerned by flim-flam that is discussed elsewhere.'

True Ste, though the debt doesn't mature until December 2026.

I agree SP...it does seem a bit comical when the response to some of these things such as Ingenuity/Nutrition being valued at £0 from the city seems to be things like "but MM has a golden share" (which he always had from beginning).

Economic news slightly all over the place...US inflation at 4 decade high but UK returned to growth in May with a surprise 0.5 GDP gain and there is also extremely low unemployment...so if we did have a recession it's going to be an unusual one.
Also it does seem prices have fallen back recently: "“This report confirms that the Fed will need to hike by 75bp again at the end-July meeting,” Michael Pearce, senior US economist at Capital Economics, said.
However, he noted that retreating commodity prices and signs of an economic slowdown should weaken price pressures going forward. “That in turn should help to contain expectations that Fed officials will opt for an even larger 100bp hike,” Pearce said."

I believe the inflation data is based on a month back right? From what I can see prices have fallen a fair amount since then, will be interesting to see the reading next month. https://tradingeconomics.com/commodity/brent-crude-oil

Well the market valued it at £8 18 months ago...I doubt you were suggesting "market knows best" at the time.

Reasoned did you delete the investment banker thread?