Broker tips: Future, Tritax Big Box, Dr Martens
By Iain Gilbert
Date: Wednesday 01 Dec 2021
(Sharecast News) - Analysts at Berenberg raised their target price on media firm Future from 4,890.0p to 5,225.0p on Wednesday following the publication of the group's solid full-year results.
Berenberg said Future had delivered "very strong" full-year 2021 results, with its positive growth and margin trajectory, as well as strong first-quarter trading in the new year, leading management to upgrade full-year 2022 adjusted underlying earnings guidance by more than 10%.
The German bank said Future's results capped off "an exceptional year" for the firm, during which it upgraded its 2021 and 2022 full-year earnings per share estimates for by 63% and 89%, respectively, while its shares doubled in size year-to-date.
"We believe that 2022 will be very strong also, and we anticipate further upgrades from: organic growth, integration synergies, margin expansion and additional M&A," said Berenberg, which kept Future as its 'top pick' in the sector.
"Future's valuation remains very attractive at 22x FY 2022 P/E, which - in our view - materially undervalues its EPS growth outlook."
JPMorgan initiated coverage of Tritax Big Box at 'overweight' on Wednesday with a 265.0p price target as it noted the company has a significant landbank of development opportunities.
JPM said the scale of the landbank allows for a potential doubling of the portfolio to more than £10bn and a rent roll of £447m, up from £175m in the first half of last year.
"Access to this pipeline alleviates a major risk - sourcing future development opportunities - and provides a runway for investment for a number of years to come," it said.
"Tritax is geographically diverse, with over half of the portfolio built post 2010 and it counts Amazon as its single largest tenant.
"The outlook for logistics property in the UK is strong, and with Tritax's circa 40.0m square foot development pipeline - enough to double the portfolio in size - the company offers one of the most focused ways of playing UK-wide logistics property demand."
Barclays upgraded Dr Martens to 'overweight' from 'equalweight' on Wednesday, keeping the price target at 480.0p, as it argued that the iconic footwear company has an "attractive brand with many levers to drive revenue and EBITDA growth".
Although the company has so far met IPO guidance, a number of factors had resulted in negative sentiment, Barclays said, namely the departure of the firm's chief marketing/product officer and its chief digital officer.
Also denting sentiment have been the absence of an EPS 'beat and raise' narrative, which had been expected by many investors after the IPO; concerns over industry-wide issues relating to supply chain disruption; and Covid-related trading restrictions, which may return with the Omicron variant.
"These factors have contributed to a significant de-rating in recent months," the bank said.
"However, we continue to like the exposure to a strong brand and we believe the company still has the ability to grow via significant headroom in many geographies, conversion of markets, rationalising wholesale, and improving the DTC mix."
Barclays said the de-rating was an opportunity for investors to build a position.
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