We all make mistakes…..17 Sep 2022 12:32
THG gets rating downgrade by Liberum Capital to 'hold' from 'buy' as analysts slash their target price
The Liberum analysts noted that THG's interim results brought another round of downgrades as sales and profitability were both below market expectations
THG boss Matthew Moulding
"We have clearly gotten this call wrong ... as although the shares are down 94% yoy, we struggle to see upside in the near term as there remain downside risks to 2022E guidance," the Liberum analysts concluded
THG PLC (LSE:THG) has had its rating downgraded by Liberum Capital to 'hold' from 'buy' after its analysts slashed their target price to 45p from 380p reflecting a moving away from a SOTP (sum of the parts) to the traditional DCF and RoCE/WACC methodologies to value the group.
The Liberum analysts noted that THG's interim results brought another round of downgrades as sales and profitability were both below market expectations.
They said the company, parent of online retailer The Hut Group, also failed to deliver the promised divisional breakdown of profitability and cash flow, which it now expects to provide in 2023.
Capex plans have been cut, and focus has moved to restoring profitability and generating FCF at a time when capital is difficult to raise, and the group has over £200mln of net debt, the analysts noted.
"We have clearly gotten this call wrong ... as although the shares are down 94% yoy, we struggle to see upside in the near term as there remain downside risks to 2022E guidance, outlook for next year is clouded and the group is now back in debt," the Liberum analysts concluded.
After big falls following the interims on Thursday, THG shares rallied 6.9% higher in late afternoon trading on Friday to 42.76p.
Sorry if already posted but just found this.
They seem to have similar views to Barclays
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