LONDON (ShareCast) - (Sharecast News) - Analysts at Jefferies upgraded online retailer Naked Wines from 'hold' to 'buy' on Tuesday despite the firm's "upbeat but mixed" first-half results.
Jefferies said Naked Wines' recent interim results proved that the 2021 trading year's Covid-boosted first-half result was "a challenging comparative" despite the group making "positive operational progress" throughout the period.

In addition to the tough comparative, Jefferies said Naked Wines had been impacted by some inefficiencies in new customer acquisition, leading it to lower revenue and repeat contribution estimates by 6-7% for 2022-2024 and cut its target price on the stock from 880.0p to 800.0p.

However, Jefferies still expects to see a "rapid reacceleration in top-line momentum" of at least 16% in 2023 and over 20% in 2024.

"Notwithstanding a mixed set of H1'22 results that sees us lower our outer year revenue and repeat contribution estimates, we remain firmly positive on Naked Wines' model. Our research suggests a demonstrable premium in value for customers and an internal rate of return on new customer investment of over 40%. With 26% upside to our revised price target, we move from 'hold' to 'buy'," said Jefferies.

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