Broker snap: Canaccord upgrades Moneysupermarket after Q3 beat

6th Nov 2013 10:38

Canaccord Genuity has raised its rating for price-comparison website Moneysupermarket.com Group (MONY) from 'hold' to 'buy' after the firm's better-than-expected third-quarter update on Wednesday."MONY pointed to flat July revenues at the time of its interim results on July 31st, but has seen a pick up in revenues through the remainder of the quarter," said analyst Simon Davies.Group revenues and earnings before interest, depreciation and amortisation (EBITDA) were up 5% and 26% on last year, respectively.Davies also pointed out that momentum has picked up going into the fourth quarter with revenues 25% higher in the first few weeks "despite tougher comparables, given the FY13 Q3 acquisition of MoneySavingExpert".MONY is now guiding to full-year EBITDA being "mid-single digital percentage" ahead of analysts' expectations. Canaccord therefore has lifted its EBITDA target from £79.8m to £82.5m.Davies said: "Moneysupermarket shares have been particularly weak since the interim results, with the shares down by 26%. [...] We nudge down our target price from 213p to 205p [...] and this points to 32% potential upside. We therefore raise our recommendation back from 'hold' to 'buy'."The stock was up 17.42% at 182p in morning trade on Wednesday.BC