Canaccord Genuity lowers On the Beach target price

25th Sep 2026 10:48

(Sharecast News) - Canaccord Genuity cut its target price for On the Beach from 240p to 220p on Friday after the group's FY26 trading update, saying reduced FY27 guidance and a still‑fragile consumer backdrop limited upside despite a stronger finish to the year.

On the Beach reported improving booking momentum through the second half, delivering 9% bookings growth and 6% totl transaction value growth for FY26. Adjusted pre‑tax profits were expected at £22 to £23m, ahead of the £20m consensus. However, initial FY27 pre-tax profit guidance of £28 to £35m represents roughly a 10% downgrade at the midpoint, prompting Canaccord to lower its estimates.

Canaccord said the outlook reflected both a challenging macro environment and additional platform investment that would weigh on margins.

The Canadian bank upgraded its FY26 pre-tax profit forecast by around 10%, but made broad cuts to FY27 and FY28, trimming FY27 revenue by 8% and pre-tax profits by 18.5%, and reducing FY28 revenue and pre-tax profits by 11% and 25%, respectively.

While booking trends strengthened late in FY26 - with summer 2026 bookings now 4% ahead of last year and the past eight weeks up 17% - Canaccord said it remained unclear how much of the improvement reflected genuine demand rather than a temporary shift in booking patterns following Middle East disruption. With shorter booking windows, likely airline price inflation and continued pressure on UK consumers, visibility into FY27 remained limited.

OTB now trades on 11.6x Canaccord's revised FY27 earnings estimate, leading the broker to reiterate its 'buy' rating but note that the scope for further re‑rating had narrowed.

Reporting by Iain Gilbert at Sharecast.com