Portfolio

Berenberg upgrades Moneysupermarket.com to 'buy'

By Iain Gilbert

Date: Wednesday 20 Oct 2021

Berenberg upgrades Moneysupermarket.com to 'buy'

(Sharecast News) - Analysts at Berenberg upped their rating on price comparison website business Moneysupermarket.com from 'hold' to 'buy' on Wednesday, stating it believes the shares were being valued on "trough earnings at trough multiples".
Berenberg said macro headwinds for the firm will not last forever, acknowledging that Moneysupermarket.com's third-quarter earnings were "expectedly weak" as travel was still depressed by the overhang of Covid-19.

"While these trends result in a material re-basing of our FY 2021-22 revenue and EBITDA estimates, these macro headwinds will not last forever, and we are approaching the trough in our view," said the analysts.

Berenberg said it expects organic growth to return in 2022 which, coupled with the acquisition of Quidco and improving margin trends, should drive "a double-digit earnings compound annual growth rate" in 2021-23.

The German bank, which lowered its target price on the stock from 310.0p to 275.0p, also reckons Moneysupermarket.com could become a takeout target.

"While MONY's outlook is not free of its challenges, with the shares trading on a near 7% free cash flow yield, we think risk is skewed to the upside," said the analysts.

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