Broker tips: On The Beach, JD Sports, Baltic Classifieds
By Iain Gilbert
Date: Thursday 25 Sep 2025
(Sharecast News) - Canaccord Genuity has lowered its target price for On The Beach following a worse-than-expected end to its financial year, but has kept a 'buy' rating on the stock, citing improving growth momentum over the medium term.
The broker cut its target price for the shares from 313p to 293p, which - following a 20% slump in the stock on Wednesday - indicates 43% upside from the most recent closing price of 205p.
Updating on trading, the online package holiday specialist said despite a "record" year to 30 September, bookings for summer 2026 were faring less well, as consumers opted to book far nearer to departure.
As a result, full-year adjusted pre-tax profits - excluding the now-discontinued B2B operations - are now slated to come in between £34.5m and £35.5m, compared with the £38.4m consensus forecast.
Canaccord Genuity said it was lowering its profit estimates "to reflect the tougher trading and macro environment", but said: "Despite the profit warning, we believe OTB is well positioned to accelerate growth medium term and the stock trades on a FY26E PE of just 10x."
The broker said the group's expansion into the city breaks market and debut in Ireland "should deliver improved growth medium term".
Berenberg has reiterated a 'buy' recommendation for JD Sports despite an underwhelming set of interim results this week, citing the stock's low valuation and the company's potential for a recovery.
First-half pre-tax profit of £351m was close to the retailer's implied guidance of £354m, representing 40% of the full-year consensus forecast, which stood at £885m prior to the results.
That has since come down to £878m - implied by the guidance range of £853m-914m - though Berenberg has trimmed its own estimate from £782m to £865m due to updated FX translation rates.
"We continue to expect lfl sales to be down by 2.5% in H2, the same rate as seen in H1, while the gross margin could continue to dip as a result of the business mix and a promotional UK online sports fashion market," the broker said.
Nevertheless, Berenberg said it remains "constructive on the company's recovery potential", with the 2026 FIFA World Cup next summer expected to bring a "halo effect" to the sportswear market. Meanwhile, the broker highlighted the company's recent work to catch up on technology and logistics infrastructure, as it ramps up its new Heerlen distribution centre in the Netherlands.
"At c7x forward P/E (January 2027E), the stock continues to look cheap, in our view, even if we await a LFL sales recovery as the likely catalyst required for a re-rating," the broker said.
Analysts at Berenberg also lowered their target price on Baltic Classifieds from 395p to 360p on Thursday following the group's "very brief and unscheduled" AGM trading statement on 24 September.
Baltic Classifieds pointed to continued weakness in the Estonian car market and, as a result, revised its full-year outlook. Baltic Classifieds now expects revenue and profit growth for the full year to be 3-4% below its previous expectations.
"We revise our numbers to reflect this revised guidance, effectively reducing our FY26 revenue and profit estimates by 4%. We also adjust our share buyback assumptions accordingly. We understand that the other divisions continue to trade as expected. This means that we expect growth to fall short of management's target of 15% annual revenue growth set out by the company at its IPO," said Berenberg.
"We maintain our growth assumptions in outer years, prudently assuming that the Estonia car tax is not repealed and that trading volumes remain at lower levels due to the increased cost of business."
The German bank said the stock now trades on a FY26 price-to-earnings ratio of 27.0x and an FY26E free cash flow yield of 4.0%. Berenberg added that it continues to value Baltic Classifieds using a discounted cash flow and P/E multiples approach.
"The stock is now trading at a discount to its two-year historical average of 33x FY1 P/E, which we think is an attractive entry point to what remains a compelling investment case," added Berenberg, which reiterated its 'buy' rating on the stock.
Reporting by Iain Gilbert at Sharecast.com
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