Broker snap: Canaccord downgrades Moneysupermarket after strong run

31st Jul 2013 10:29

Canaccord Genuity has downgraded its recommendation for price-comparison website Moneysupermarket.com from 'buy' to 'hold' despite an in-line set of interim figures, pointing out that the stock has risen 45 per cent so far this year.Numbers met forecasts for the six months to June 30th, though the broker said that this was "hardly surprising" given the detailed pre-close trading update just a few weeks earlier.The one positive was the dividend which was lifted by 20% to 2.2p a share.The company said it saw good growth in its Insurance , Home Services and Travel verticals while revenues in Money activities were hit by the government's 'Funding for Lending' scheme which reduced the demand for savings products.Analyst Simon Davies said: "While Moneysupermarket has delivered stellar H1 growth, this has been more to do with the MoneySavingExpert acquisition than underlying performance. The good news is that the H2 comparables in Money are much easier, while in Insurance, its website is being reconfigured so that it should move up the natural search rankings."However, challenges remain, not least a sharp year-on-year decline in motor and home insurance premiums in H1 (which may reduce the savings from switching). And H2 has not started well, with July revenues 'flat' year on year."The broker has cut its forecasts for full-year profit before tax from £75.9m to £72.2m. Nevertheless, the target for the share price was maintained at 213p.The stock was trading 14.84% lower at 180.7p by 10:28 on Wednesday.BC