Jefferies has issued a strong vote of confidence for Moonpig Group PLC (LSE:MOON), the online card retailer, by maintaining a 'buy' rating and setting an ambitious price target of 230p - a more than 40% premium to the current price.
This comes after Moonpig's participation in the bank's Pan-Euro Mid-Cap Conference, which showcased the company's robust trading performance and strategic growth initiatives.
Moonpig's recent trading update highlighted revenue growth on the higher end of mid-single digits through the second half of the year.
Looking ahead, management is focusing on increasing the gift attach rate, enhancing the customer experience, and expanding its product offerings.
The recent launch with Hotel Chocolat, for example, has seen strong performance, indicating the effectiveness of Moonpig's innovation efforts.
Moonpig is optimistic about making a meaningful contribution to growth in financial year 2025 through these initiatives, targeting double-digit medium-term growth.
For that period, the retailer aims to achieve 5-10% revenue growth, supported by a combination of factors including the return to growth of its subsidiary Greetz, continuous improvements in customer engagement, and an expansion of the Moonpig Plus loyalty program.
While EBITDA margin may see some contraction due to investments in growth, Jefferies anticipates a 4% growth in EBITDA for FY25, followed by a return to mid-to-high single-digit EBITDA growth in subsequent years.
In afternoon trading the stock was up 1.6p at 162.7p.