Brokers27 Oct 2021 10:20
Simon Bowler
Numis*. Price target: 230p
“Improved disclosure on Ingenuity key performance indicators and the strong order book is encouraging, but fails to offset the worsening momentum and worsening cash profile of the core businesses.”
Marcus Diebel
JP Morgan* Price target: 347p
“Some steps clearly in the right direction but we believe the company now has to consistently present new clients ... to restore confidence. Beauty revenues came in with a strong beat on our estimates by 8 per cent, while nutrition was weaker than expected at 9.5 per cent year-on-year growth, which is 23 per cent below our expectations. Ingenuity also came in slightly weaker at £51 million, underperforming JPM estimates by 14 per cent.”
Andrew Ross
Barclays*. Price target: 660p
“Full-year guidance on revenue and margin is reiterated pre-foreign exchange impacts — not bad given several wobbles among European ecommerce names this reporting season. That said, foreign exchange is worse, and we bring down margins as a result. This remains an investment case that has downside risks, but we see value in the sum of the parts and Ingenuity.”
James Grzinic
Jefferies*. Price target: 700p
“The hit to ecommerce earnings before interest, tax, depreciation and amortisation estimates in 2021 (with an outsized impact on nutrition) is stealing the headlines and overshadowing the considerable progress on Ingenuity commerce growth, disclosure and SoftBank commitment. This provides a feel for just how cautious the market is on THG nowadays.”
Sherri Malek
RBC Capital Markets. Price target 715p
“We believe online market growth will continue to be solid ... and view THG as well positioned to benefit with its leading brand positions. The commercialisation potential of its end-to-end Ingenuity solution provides a unique element to the equity story, although visibility is low. We see greater valuation upside potential elsewhere.”
Catherine O’Neill
Citi*. Price target: 900p
“Given foreign exchange headwinds have worsened, the adjusted ebitda margin for the year is likely to be circa 8 per cent, with consensus at 8.8 per cent, which implies high single-digit percentage reduction to consensus group-adjusted ebitda.”
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