Broker tips: Cineworld, Trustpilot, Boohoo, Dr Martens
Peel Hunt reiterated its 'hold' recommendation on Cineworld on Tuesday as it cut the price target to 75.0p from 85.0p, noting that the share price has fallen but is not yet in "buy territory".
The broker said it was cutting its forecasts "but as a catch-up not a downgrade", as it had not updated forecasts since the group's FY20 results.
Peel reduced its FY21E EBITDA forecast from $975.0m to $510.0m now that it has slightly greater visibility on the year ahead.
"Cineworld's share price has drifted off since the highs of March, when it reached 120.0p, more sharply recently," it said. "As discussed in our note today, if we had stuck to the 7x recovered EBITDA valuation we used previously, we would have increased our target price to 90.0p and rated Cineworld a buy.
"However, tweaking the 7x to only 6.7x lets us set our new target price at close to the current price which, intuitively given the scale of the risks, appears to us to be the right recommendation."
Analysts at Berenberg raised their target price on consumer review website operator Trustpilot from 385.0p to 430.0p on Tuesday after the firm's "very strong" first-half trading update yesterday.
Berenberg highlighted that Trustpilot delivered constant currency revenue growth of 22% year-on-year and bookings growth of 28%, comfortably ahead of its full-year 2021 run-rate expectations.
The German bank stated that if these trends were to continue, it expects Trustpilot to upgrade the full-year 2021-22 guidance provide at the time of its interim results on 15 September.
"Given our conviction in these underlying trends and the growth potential across all key regions, we upgrade our FY 2021 and FY 2022 revenue forecasts by 3% and 5% respectively, which leads to an increased price target to 430.0p," said Berenberg.
The analysts, who also stood by their 'buy' rating on the stock, pointed out that reacceleration in US revenue and bookings was "a key debate among investors" given the large market opportunity and the competitive landscape.
RBC Capital Markets upgraded its stance on shares of fast-fashion retailer Boohoo on Tuesday to 'outperform' from 'sector perform' and lifted the price target to 410.0p from 380.0p.
The bank said Boohoo shares are attractively valued, particularly considering the potential for consensus upgrades and the stock's relative underperformance versus Zalando and Asos.
"We also take a more constructive view on long-term margins," RBC said. "The company's steps towards improving its ESG policies are credible and over time, we expect the shares to re-rate to reflect that."
Goldman Sachs upped Dr Martens to 'buy' from 'neutral' on Tuesday, hiking the price target to 535.0p from 490.0p.
In a note back in March, the bank had already highlighted three drivers underpinning the company's growth profile: global expansion, most notably in the US and China, enhanced brand control by bringing third-party distributor markets in house and expanding direct-to-consumer sales.
The bank said that it has taken a deeper look at the potential in converting distributor markets, with a particular focus on Italy.
"Using the success that Dr Martens has seen converting Germany two years ago as a reference point, we forecast Italy can achieve forecast Italy can achieve circa £65m of sales by FY23E (versus circa £20.0m in FY21, on our estimates).
"We now forecast that Dr Martens can grow revenue by 23%/18%/16% in FY22/23/24E (versus 19%/16%/15% prior)."