RBC has swum firmly against the tide by upgrading The Hut Group (THG), the e-commerce company, to 'outperform', despite shares being down 60% in the last three months after a string of highly critical assessments by other analysts.
The broker said there is value in THG Ingenuity, the e-commerce platform that has been the butt of much of the City's ire, or more than the zero currently being attributed to it by the market.
An order book more than doubling in 2021 gives momentum going forward and revenue is forecast to increase tenfold over the next five years to £500mln.
RBC also highlights several other catalysts that should help performance in the coming year.
SoftBank’s proposed deal with THG to buy 20% of Ingenuity for US$1.6bn, originally announced last May, will go ahead believes RBC, albeit it is possible the terms will be amended.
The company has taken steps to improve governance with the removal of chief executive Matthew Moulding’s special share rights and a commitment to appoint a new independent chair cited as key steps.
A main market premium listing in the second half of 2022 will also help, provided all the necessary conditions are met.
RBC has an unchanged price target of 500p.
Shares were down 1.13% in afternoon trading, changing hands at 115p.