Market research group YouGov PLC (AIM:YOU) has had its wings clipped in the short term, with UBS trimming its price target to 570p from 700p. Even so, the bank keeps a 'buy' rating on the shares, which were off 2% at 345p in early afternoon trading.
The problem lies in the company’s Data Products division, the subscription service where clients track brand performance.
Growth here has slowed as marketing budgets tighten, meaning UBS has cut revenue forecasts by up to 6% for 2026 and 2027 and pared back profit estimates more sharply.
Still, the analysts see reasons for optimism. Renewal rates remain above 80%, and a new, lower-priced version of its flagship BrandIndex tool, called CategoryView, is being rolled out to reach the many brands YouGov does not yet monetise.
There is also the prospect of artificial intelligence helping to cut costs and sell more to existing customers.
Self-help measures are expected to play a role too. A £20 million savings programme should deliver most of its benefit in the second half of 2025, helping to offset softer sales.
In the longer run, UBS expects marketing spend to rebound, particularly in technology, which accounts for almost a fifth of YouGov’s sales.
That should support annual growth of around 6% in revenues over the rest of the decade. The bank forecasts double-digit growth in earnings per share and a healthy cash flow yield, underpinned by what it calls a “flight back to quality” in research.
On valuation grounds, YouGov screens well. The stock trades well below its ten-year average multiple and looks cheap against rival Ipsos, despite higher forecast growth.
UBS reckons that leaves room for a 60% upside, though investors may need patience while the short-term headwinds blow through.