THG Price Target Raised at Jefferies On ‘Strong’ Q2

THG’s (LON: THG) shares rallied on Wednesday, boosted by a positive trading update…

The company, formerly The Hut Group, revealed a healthy Q2, with a continued successful focus on profitability and cash generation, and as a result, it expects a “significant increase in H1 2023 profitability,” with adjusted EBITDA in the range of £44 million to £47 million. Continuing adjusted EBITDA is seen between £47 million and £50 million.

Furthermore, the British e-commerce retailer maintained its guidance for FY 2023, with adjusted EBITDA expected to be in line with the company consensus.

THG closed Wednesday’s session at 77.84p, up 6.8% on the day, adding to its strong gains this year. It is up over 73% YTD.

Reacting to the update, Jefferies analysts raised the firm’s price target on THG to 95p from 85p in a note to clients, keeping a Buy rating on the shares.

The investment bank said THG reported a “strong” Q2, maintained FY23 guidance, and endorsed FY23 adjusted EBITDA consensus. They also noted that cash generation has been “ahead of expectations.”

According to TipRanks, two analysts have a Buy rating on the stock, with one at Hold and one at Sell. The average price target of 108.5p represents a potential 38% upside in the stock.

By Sam Boughedda