Panmure Liberum has argued that a take-private bid for Sweden's Viva Wine Group lays bare how cheaply the UK's direct-to-consumer wine companies are trading, reiterating buy ratings on both Naked Wines PLC (AIM:WINE, OTCQX:NWINF, FRA:MWJ) and Virgin Wines UK PLC (AIM:VINO).
The broker said the offer for Viva, pitched at 8.5 times forecast 2026 enterprise value to earnings before interest, tax, depreciation and amortisation, highlighted a steep valuation gap with the two London-listed players.
Naked Wines trades on just 3.0 times forward enterprise value to earnings, a discount of roughly 80% to the multiple implied by the Viva bid.
Panmure described both stocks as compelling value.
The bid for Viva came from Riesling Ventures, a consortium of founding and management shareholders who already control more than half of the company.
The recommended cash offer of 38.5 Swedish krona per share represents a 38% premium to the undisturbed price, though it sits below the stock's 52-week high.
Viva develops, imports and sells wine through both business-to-business and direct-to-consumer channels, the latter operating e-commerce brands across several European markets.
Panmure used the deal to draw out the valuations of its two covered names.
On Naked Wines, the broker said the company was midway through a transformation aimed at becoming smaller but more profitable, generating cash by running down excess inventory.
It pointed to a medium-term adjusted earnings target of £9 million to £14 million a year, alongside up to £70 million in cumulative cash generation by the 2030 financial year, equivalent to 1.4 times the current market value.
The company has already returned £6 million to shareholders through buybacks in the current year.
Naked Wines is expected to deliver £200 million of net revenue at a 3.6% adjusted earnings margin this year, with £32 million in net cash.
Panmure has a buy rating and 160p price target on the shares, which trade at 70p.
The broker was starker still on Virgin Wines, where it said the market ascribed no value to the operating business.
Virgin Wines holds £15 million of net cash against a market value of only £14 million.
Panmure said the company was in the early stages of a multi-year growth plan, targeting annualised revenue of at least £100 million by the 2030 financial year at a 7% earnings margin.
Growth has accelerated through the current year, the broker said, with sales improving across successive quarters.
Virgin Wines is on track for £61 million of net revenue this year, though it expects a small adjusted earnings loss as it invests for growth, before a recovery to £1 million next year.
Panmure has a 'buy' rating and 65p price target on Virgin Wines, with the shares trading at 28.5p.
The broker carries Naked Wines as a corporate broking client.
