Credit Suisse downgrades Moneysupermarket, shares correct lower
Analysts at Credit Suisse downgraded their recommendation on Moneysupermarket.com after a 34% run for the shares over the previous four months took them near to their target price of 355.0p.
FTSE 250
20,874.40
14:25 07/10/24
FTSE 350
4,586.65
14:25 07/10/24
FTSE All-Share
4,543.32
14:25 07/10/24
Media
12,353.38
14:24 07/10/24
Mony Group
212.40p
14:14 07/10/24
The analyst lowered his recommendation from 'Outperform' to 'Neutral' while keeping his target at 355.0p, with the latter a 15.0% premium to the its peers in the Euro Media space on a 2017 price-to-earnings multiple basis.
In a research note sent to clients, Joseph Barnet-Lamb also said he first wanted to see proof the firm's investment in technology would allow the group to raise margins.
Barnet-Lamb expected that to be evident in the second half of 2017, given that the new chief, Mark Lewis, would join on 13 March.
Gross margins had fallen from 80.0% in fiscal year 2015 to 75.0% in fiscal year 2016, with management having guided towards margins of 73.0% "going forward".
Over the second half of 2016 margins had retreated further to 73.0%.
Moneysupermarket.com attributed those declines to higher marketing spend and the company's energy switching cash back.
As of 1400 GMT shares in the online price comparison site were down by 6.89% to 326.80p from the 52-week high (and technical resistance) reached during the previous session.