Moneysupermarket.com PLC (LON:MONY) extended last week’s post-results decline on Tuesday as Citigroup downgraded its stance on the price comparison website group to ‘neutral’ from ‘buy’.
The US bank also chopped its target price for the FTSE 250-listed firm back to 300p from 400p after reducing estimates, with the shares trading at 270.70p, down 1.9% on Monday’s close.
READ: MoneySupermarket.com Group sees shares slide as guidance for flat earnings in 2018 overshadows revenue growth
In a note to clients, Citi’s analysts said Moneysupermarket’s downgrade to full-year 2018 expectations and the announcement of further cost investment after completion of the prior technology replatforming “has thrown up a number of questions around near-term market share erosion and uncertainty around long-term margins.”
They added: “While we see valuation support from the 15.6x FY18e ex-cash PE, cash generative business model and net cash balance sheet, we prefer to wait on the sidelines until a clearer path to stronger profit growth emerges.”