Berenberg slashes target price on Made.com

Berenberg said Made.com delivered full-year 2021 results in line with expectations communicated by the group at the time of its trading update in January and, with the stock down roughly 46% year-to-date, the current year guidance downgrade was clearly anticipated by the market.

However, the German bank stated Made's top-line guidance for 15-25% gross sales growth and 25-35% net revenue growth implied no underlying market tailwind from the online channel shift or underlying market growth in home furnishing demand, with growth market-share-driven.

"Made's growth may be challenging in a more constrained economic environment; furthermore, if store-based peers improve their own online propositions, competition from these omnichannel peers will increase. Nevertheless, Made's own-brand and curated product proposition provides differentiation. We forecast 23% net revenue growth in FY 2022E," said Berenberg, which reiterated its 'hold' rating on the stock.

Looking forward, the analysts highlighted a "challenging consumer environment" that may make achieving its 2022 expectations difficult. Moreover, Berenberg said the reaffirmed 2025 financial targets remained "ambitious" in its view.

"Nevertheless, the current valuation implies the market is significantly discounting Made's ability to achieve these 2025 targets. We lower our price target to 90.0p, but we recognise the risk/reward is starting to look more compelling at these levels."