Strategic Valuation and Growth Potential of THG’s Myprotein: A Buy Recommendation

In a report released today, Andrew Wade from Jefferies maintained a Buy rating on THG (THG – Research Report), with a price target of p75.00.

Andrew Wade’s rating is based on the strategic potential and valuation considerations surrounding THG’s Myprotein brand. The recent proposal to acquire Myprotein, although rejected, highlights the brand’s significant value and market interest. The offer, despite being unsolicited and non-binding, suggests a valuation range of £400-600 million, which underscores the intrinsic worth of Myprotein in comparison to THG’s overall market capitalization of approximately £450 million.
Wade acknowledges the risks associated with the proposal, particularly the lack of funding and execution details, which led to its rejection by THG’s Board. However, the interest from reputable investors like Sir Terry Leahy and others indicates confidence in Myprotein’s potential. This external validation, coupled with the brand’s strategic importance to THG, supports Wade’s Buy rating, as it suggests future growth opportunities and a potential revaluation of THG’s stock.