Berenberg upgrades Moneysupermarket, cites attractive entry point

Berenberg upgraded Moneysupermarket on Thursday to ‘buy’ from ‘hold’ and lifted the price target to 295p from 290p, citing an attractive entry point.

The bank noted that since it re-initiated coverage on 20 November 2023, Moneysupermarket’s share price has declined by 12%.

"Shares are now trading on 14.1x FY24E price-to-earnings, which we think is a better buying level, trading on a 15% discount to the group’s five-year average 12-month forward P/E multiple," it said. Berenberg’s new price target implies around 20% upside from the current share price.

The bank pointed out that FY23 results on 19 February showed that group revenue came in 2% above consensus at £432m, driven by a strong performance in insurance.

"The growth in the vertical was driven predominantly by insurance premium inflation, which was circa 35% in car and home," the bank said.

"Money was -3% yoy, but this was against a tough comparable following a large switching offer in FY22 that did not repeat and interest-rate increases dampening demand for borrowing products, although current-account switching was strong."

It noted that home services saw another year of negligible energy revenues and broadband switching was weaker, but said mobile switching was strong in the year.

Berenberg said group adjusted EBITDA was £132m, in line with consensus, and adjusted EPS was 16.0p, also in line.

At 1010 GMT, the shares were up 3.7% at 249.60p.