Berenberg lowers target price on 'overlooked' Moonpig
Moonpig Group
248.00p
16:35 04/11/24
Analysts at Berenberg lowered their target price on greeting cards and gifts retailer Moonpig from 390.0p to 420.0p on Friday despite saying "another encouraging update" from the firm being overlooked by the market.
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Berenberg noted that Moonpig shares were now down roughly 44% year-to-date and approximately 12% since the company's trading update on Tuesday, in which it upgraded full-year sales guidance and reiterated expectations for the 2023 trading year.
However, with margins coming under pressure across its consumer coverage amid mounting cost-inflation concerns, Berenberg believes that Moonpig's resilience has been "overlooked".
"With the company now trading on c15x April 2024 P/E, or a c8% FCF yield, we reiterate our 'buy' rating," said Berenberg.
The German bank also highlighted that in its update, Moonpig upgraded its full-year sales guidance by circa 5% following "an unexpectedly strong" December/January performance as the Covid-19 Omicron variant restricted mobility in both the UK and the Netherlands.
"Although the company is maintaining its existing FY23 guidance, recognising that this FY22 uplift was Covid-19- driven rather than underlying, we believe that there are some broader positives to consider," said Berenberg.