YouGov PLC (LON:YOU) has been downgraded to ‘hold’ from ‘add’ by analysts at Peel Hunt on valuation grounds following a pre-close trading update from the polling firm.
In a note to clients, the City broker’s analysts noted that the company confirmed that trading in its second-half has been in line with expectations.
READ: YouGov yet to see material impact from coronavirus pandemic
They pointed out: “Data products has been the stand-out division (we look for 28% organic growth). The Data services division’s performance is described as steady and customer research solid despite the winding-down of a major contract in Kurdistan.”
The Peel Hunt analysts added: “The company’s bias towards technology clients has been a source of resilience, as has the online collection of data and delivery of services during this period of lockdown. Covid-19 has validated the business model and will drive news sales in due course. The company’s cash position remains strong.”
The analysts said they have made no change to their forecasts or 700p target price for YouGov, but have cut their rating in light of the “recent very strong outperformance” by the stock.
They noted that YouGov shares trade at an all-time high, with the stock on a PE of 58x for full-year 2020, dropping to 48.4x in full-year 2021.