Panmure Liberum reckons Naked Wines PLC (AIM:WINE, OTCQX:NWINF) is sitting on a cash bonanza.
The broker has slapped a 150p price target on the stock, nearly double Thursday’s closing price, and declared it a “strong buy”, pointing to a future net cash pile of over £100 million and a free cash flow yield rising to 13% by 2026.
According to Panmure, the revamped strategy is now firmly on track. Revenue may be sliding for now, but the key message is that margins, retention and cash generation are improving, with more than £70 million expected to be unlocked over the next five years through inventory reduction and operational savings.
With shares at just 77.4p, the broker says the valuation fails to reflect the value of Naked’s 600,000-strong customer base or its shift to sustainable, evidence-based growth.
The numbers back it up: around £33 million of cash is already in the bank, with another £40 million expected from excess inventory sales.
The market appears to be catching on. Shares are up sharply from the lows, and further updates on cash returns and growth guidance are expected alongside full-year results in July. For now, investors are raising a glass.