Peel Hunt, Shore upbeat on musicMagpie
MusicMagpie
6.50p
16:55 24/04/24
Peel Hunt and Shore Capital were upbeat about musicMagpie's prospects as the brokers started coverage of the gadget recycler after its listing.
General Retailers
3,926.04
17:09 24/04/24
MusicMagpie refurbishes and sell smartphones, tablets, consoles and other electronic products. It raised £15m in a share offer in April, valuing the company at £208m. Both brokers pointed out the company's growth prospects and barriers to competition.
Peel Hunt advised investors to 'buy' the shares and set a price target of 233p. Analyst James Lockyer said the market was expanding by 15% a year to 2024 - faster than equipment makers such as Apple and with better green credentials.
"Its strong brand trust is both a differentiator and the moat [against competition]," Lockyer wrote in a note to clients.
Shore, the company's house broker, said musicMagpie had environmental credentials, a proprietary technology platform and a growing list of alliances, including with Apple. The broker predicted a three-year compound annual growth rate of 19.8% with earnings per share building and a debt-free balance sheet.
"After a period of considerable development and investment, we forecast strong ongoing financial returns," analyst Clive Black wrote in a note to clients. "Overall, we see musicMagpie as having very high barriers to entry, as a result of its key people, business model, markets, ESG credentials, technology platform and financial prospects."
MusicMagpie shares fell 0.4% to 190.30p at 13:20 BST.