Broker tips: Trustpilot, Associated British Foods
By Iain Gilbert
Date: Thursday 16 Jan 2025
(Sharecast News) - Analysts at Berenberg raised their target price on reviews website operator Trustpilot from 270.0p to 330.0p on Thursday following a "positive FY24 trading update" from the group earlier this morning.
After a strong H1, Berenberg noted that Trustpilot has achieved a further acceleration in bookings growth in H2, with North America being the standout performer, delivering 29% constant currency bookings growth in H2.
As a result, the German bank increased its FY24 revenue and adjusted underlying earnings forecasts by 2% and 7%, respectively.
Berenberg also said Trustpilot's shares were trading on 5.2x FY25 enterprise value/sales ratio, which it sees as undemanding given the attractiveness of the growth profile and the longer-term opportunity.
Citi downgraded Primark owner Associated British Foods to 'sell' from 'neutral' and cut the price target to 1,770p from 2,400p.
The bank said that its FY25 and FY26 earnings per share estimates are 4% and 15% below Visible Alpha consensus.
"At Primark, we are cautious on the sales outlook (-4%/- 7% versus consensus), moderating expectations for space growth and LFLs as switching and audience overlap data suggest its value position is more at risk from online discounters and resale, and given our -0.4% 2025e UK HAC forecast," it said.
"Our proprietary analysis of Primark's gross margin leads us to forecast a -170 basis points drag in FY26e from USD strength.
"We see risks to growth and pricing power for ABF's UK food businesses (33% of total food) as UK food inflation accelerates in 2025e."
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