Analyst James Wheatcroft from Jefferies maintained a Buy rating on The Gym (GYM – Research Report) and keeping the price target at p180.00.
James Wheatcroft has given his Buy rating due to a combination of factors including The Gym Group’s strong financial performance and strategic growth plans. The company has exceeded expectations with a 4% increase in FY24 EBITDA compared to consensus, and has provided an optimistic outlook for FY25 with a 2% rise in EBITDA guidance reaching the top of the current consensus range.
Additionally, The Gym Group has shown significant improvements in key financial metrics such as a 24% increase in EBITDA, a reduction in leverage to 1.3x, and an 8% rise in revenue year-over-year. The company’s commitment to opening 50 new gyms over the next three years, funded by free cash flow, is expected to further enhance its market position and reduce leverage. These factors, combined with the potential for valuation expansion as confidence in the management team grows, underpin Wheatcroft’s positive outlook on the stock.