Berenberg raises target price on Moonpig following interims

Moonpig released its interim results on Tuesday, reporting "significant progress" on both strategic and financial objectives. Berenberg said Moonpig's numbers highlighted that its deleveraging process was "well on track", with management guiding to a reduction in net debt/underlying earnings of 0.5x in 2024.

The German bank, which reiterated its 'buy' rating on the stock, noted that Moonpig's key strategic announcement, alongside the results, related to new product features for the platform that will enable incremental value to be extracted from existing customers and drive an acceleration in growth once macro conditions improve.

"While adjusted EBITDA margin exceeded consensus by 640 basis points, benefitting from greeting card price changes and the opening of a new operational facility in Tamworth, management highlighted a margin tailwind from discretionary operating expenditure being withheld until H2 2024," said Berenberg.

"We forecast 180 basis points adjusted EBITDA margin reversion in H2 2024 to reflect these discretionary costs being incurred, and project full-year 2024E EBITDA margin of 26.2%, just above management's medium-term target."

Reporting by Iain Gilbert at Sharecast.com