By Jon Robinson,Jp Morgan
Copyright cityam
Shares in THG plc have been upgraded by JP Morgan after surging in value in recent weeks.
The Manchester-headquartered group has seen its share price rise from 27p on 8 September to 38p today thanks to positive half-year results.
The recent increase in THG’s value means the group, which includes the likes of Myprotein and Cult Beauty, has returned to the FTSE 250 index.
THG plc was the owner of City AM until its Ingenuity division demerged from the wider group at the start of 2025.
THG ‘valuation is now balancing execution risk’
In an analyst note, JP Morgan said: “We see the tide turning post a period of strategic evolvement.
“Having been sceptical on the equity story for past three years, and maintaining our [underwriting] UW through the last two, we close our cautious stance on THG and upgrade to neutral, with the share price having meaningfully corrected over the period, while at the same time we see first signs of improved performance following a period of extensive strategic evolvement.
“Operationally, trading momentum is building (Q2 organic growth +0.9 per cent, JPMe +4.6 per cent in H225) with the business benefitting from an enhanced business model in both beauty (disposal of certain operations, own-brand investment and retail territory prioritisation) and nutrition (Myprotein rebrand, offline retail expansion and Asia model evolution) which we see setting up for sustainable and accelerated growth into year-end and FY26.
“Strategically, the THG Ingenuity demerger has focused management on core operations, and together with recent disposals (Claremont), asset optionality and cash generation (£28m FCF in FY26E), we see an improved balance sheet position.
“With shares trading down 18 per cent through 2025 (-45 per cent on a two-year view), the stock trades 6.7x EV/EBITDA 26E – we argue valuation is now balancing execution risk ahead with upside on operational delivery.”
