Berenberg slashes target price on Naked Wines

Analysts at Berenberg slashed their target price on alcoholic beverages retailer Naked Wines from 690.0p to 140.0p on Tuesday, stating there were still more challenges ahead for the group.

Berenberg said Naked Wines' full-year results did little to mitigate its concerns over the viability of the company’s customer acquisition strategy or its exposure to macro headwinds.

The German bank noted that Naked Wines now expects "a material decline" in paybacks on marketing spend for its latest cohort, leading the company to downgrade full-year 2023 sales guidance.

Berenberg also stated Naked Wines was facing uncertainty over demand given weakening consumer confidence, as well as increased costs in the year ahead.

"Despite the significant de-rating in shares year-to-date, we believe that execution risk remains high and there could be more negative news to come," said the analysts, who retained their 'hold' rating on the stock.

Reporting by Iain Gilbert at Sharecast.com