Berenberg stays at 'buy' on YouGov following CPS acquisition

YouGov announced the acquisition back in July 2023, in an all-cash transaction for a headline purchase price of €315.0m, financed with proceeds from a roughly £51.0m equity raise and a €280.0m term loan facility.

Berenberg said the acquisition of CPS GfK, an established leader in household purchase data, with panels across 18 European countries consisting of over 100,000 households brings clarity to both CPS GfK's employees and customers.

"The combined offering enhances the customer value proposition, enabling customers a 360-degree understanding of FMCG and retail customers. We forecast that the acquisition will contribute £60.0m of revenue in FY24E and circa £12.0m of adjusted EBIT," said Berenberg.

The German bank also noted that management was yet to update its medium-term targets to include the contribution of CPS GfK.

"We anticipate it will present the updated medium-term targets, at the earliest, at its H1 results in March. YouGov's shares are trading on a CY24E P/E of c20x, which we see as attractive given the outstanding global growth opportunity, and this acquisition further bolsters its offering to continue to take market share and grow in excess of the underlying mark," said Berenberg.

"Shares are trading on CY24E price-to-earnings ratio of c20x, the shares are trading on a c40% discount relative to its five-year average 12-month forward P/E. YouGov is operating in a large fragmented market, it has invested in its platform and product set, and we think it one of the best growth stories in the UK-listed universe."

Reporting by Iain Gilbert at Sharecast.com