Bernberg nudges up target price on Pendragon

Analysts at Berenberg nudged up their target price on automotive retailer Pendragon from 25.0p to 26.0p on Monday, stating "the dragon firing on all cylinders".

Berenberg made the modest move on its price target for the stock after Pendragon announced that it now expects to report an underlying pre-tax profit of roughly £30.0m for the first half - its strongest first-half outturn in several years despite significant Covid-19 disruptions.

The German bank also pointed out that Pendragon had reinstated full-year guidance and now expects underlying pre-tax profits of £45.0m-50.0m, leading to "significant upgrades" from previous estimates.

"While we make relatively modest changes to our outer-year forecasts, we think the strong H1 is a promising step in the direction of the group's 2025 target of £85m-90m PBT," said Berenberg, which also reiterated its 'buy' rating on the stock.

"We are increasingly confident about the achievability of such targets, which would leave Pendragon's current market cap of circa £260.0m far too low."