Broker snap: Westhouse upgrades Moneysupermarket.com to 'add'

21st Jun 2013 10:58

Westhouse Securities has upgraded its rating for price-comparison website Moneysupermarket.com from 'neutral' to 'add', saying that the stock offers good value following recent weakness.The stock had fallen by 12% over the last month, as of Thursday's close."We note that MONY's share price is now c.10% lower than at the time of June 5th positive trading update and announcement of a 12.9p special dividend, and is c.14% below our 210p target price on a total return basis (c.21% including the special dividend)," said analyst Roddy Davidson.Meanwhile, he highlighted that the developments were accompanied by the sale of a 20% stake by the group's founder and Non-Executive Deputy Chairman Simon Nixon "which should create improved liquidity going forward".Davidson said: "As noted at the time, we thought this sale would result in a degree of indigestion and cap a period of positive share price performance. As a consequence, we moved our recommendation from 'add' to 'neutral', but have now decided to revert to 'add' following the weakness highlighted above and as a reflection of our belief that the group's valuation now understates its attractive fundamentals."He said that Moneysupermarket has the ability to benefit from a challenging environment for domestic spend and ongoing changes in consumer buying habits. He also highlighted its dominant market share, financial strength and anticipated earnings/dividend growth over the short term.The stock was up 0.63% at 191.2p by 10:57 on Friday.