Peel Hunt has altered its ratings on several media firms as part of a reshuffle in a sector note, with shares in Auto Trader Group PLC (LON:AUTO) and Euromoney Institutional Investor PLC (LON:ERM) dipping due to downgrades.
Analysts said that FTSE 100 Auto Trader, which was downgraded to ‘add’ from ‘buy’ and had its target price cut to 500p from 510p, could still see medium-term opportunity as it had diversified its revenue stream to be less reliant on listings growth, however there had been a reversal of a growth trend in the new car market in September due to the impact of new emissions regulations.
For Euromoney, which was also knocked to ‘add’ from ‘buy’ but had its target maintained at 1,475p, Peel Hunt said the FTSE 250 firm’s trading picture in the near-term was “mixed” with MiFID regulation proving to be an obstacle to new sales in asset management.
However, analysts added that the commodity cycle was improving the operating environment for many of the company’s clients.
Another FTSE 250 downgrade to ‘add’ from ‘buy’ was Moneysupermarket.com Group PLC (LON:MONY), which also had its target cut to 330p from 340p as Peel Hunt’s analysts said the price comparison service would need to evolve from “just servicing active adopters in order to access a larger audience”.
“More investment is needed to build on the consumer journey and experience. This will involve more personalisation of services and accessing consumers through partnership relationships” the broker said.
It wasn’t all negative though, with the broker giving out some upgrades including to polling firm YouGov PLC (LON:YOU), which was lifted to ‘buy’ from ‘add’ with a retained target price of 535p as analysts expected strong organic growth from the company’s new data products and services segments as well as expanded margins.
“The company is due to launch its new five-year strategy in spring. Our expectation is that there will be a focus on “activation” and solutions, which will interact more with brand and agencies.”
PR firm Huntsworth PLC (LON:HNT) was also upped to ‘buy’ from ‘add’, however its target price was cut to 130p from 140p as analysts cited “sluggish” growth in the firm’s second half, although it added that double-digit growth in its medical and immersive segments was “easily overlooked” in the context of a slowdown at the marketing business.
“2019 needs to focus on good housekeeping (control of working capital and exceptional costs) and delivery of growth to validate recent M&A.”
In lunchtime trading Thursday, Auto Trader shares were down 1% at 451.4p, Euromoney was down 1.6% at 1,258p, Moneysupermarket was up 0.3% at 295p, YouGov was flat at 420p, and Huntsworth was down 1% at 97p.