The Naked Wines PLC strategic review is "sensible", according to analysts at Liberum Capital, and "should allay some fears about the covenants", said those at fellow City broker Peel Hunt.
Cutting costs, significantly reducing marketing spending and slowing intake of stock were the top-line points from the online wine seller's half-year trading statement-cum-strategy update, with the plan to drive an improvement in paybacks and return the group to profitability.
The lower level of marketing and general and admin costs will result in lower sales in the near-term but should translate to underlying earnings of £9mln-£13mln.
Liberum removed its 'sell' rating on the shares, moving to 'hold'.
"We welcome the return of the old CFO James Crawford who is clearly making sensible decisions and the renegotiated covenants removes short-term concerns," the Liberum analysts said.
As for Peel Hunt's analysts, they noted that Naked Wines management were no longer pursuing top-line growth.
"Too much optimism about the future meant that management took on too much stock and added too many costs. That is coming home to roost and there is an overhaul of strategy that means a much lower marketing spend on attracting new customers," they said.
Existing Angels are performing well, the Peel Hunt analysts noted, "so that underlying pool of EBIT is still there and is now more visible (hence the upgrades today), but this was always about the top line and growth there is set to stall."
Peel Hunt cut its target price for Naked Wines to 120p from 240p, versus the closing price yesterday of 94.4p.