Berenberg raises target price on the Gym Group
Analyst at Berenberg raised their target price on gym operator the Gym Group from 230.0p to 290.0p on Tuesday, stating "encouraging momentum" was now emerging.
Berenberg said it was "highly encouraged" by the recovery in membership reported in the company's interim results, as well as the "significant opportunities" that it was now seeing to grow its gym estate.
The German bank thinks the bounce-back in membership demonstrates that demand for gyms had not gone away – and it expects membership to have built further during September, as students returned to university, workers began returning to offices and "normal habits" started to re-form.
Berenberg then said the Covid-19 pandemic had "accelerated the demise of certain challenged businesses", particularly "weaker store-based retailers", which has created more new site opportunities for the firm than usual.
With the benefit of having also raised equity in July, the analysts noted that the Gym Group now expects to open 40 sites between mid-2021 and the end of 2022, an increase on its pace of openings prior to the pandemic.
Berenberg reiterated its 'hold' rating on the stock.