The Gym Group: Strong Trading Momentum, Accelerated Rollout, and Undemanding Valuation Underpin Buy Rating

James Wheatcroft, an analyst from Jefferies, maintained the Buy rating on The Gym. The associated price target remains the same with p180.00.

James Wheatcroft has given his Buy rating due to a combination of factors that highlight The Gym Group’s improving outlook and robust operating performance. He notes that the company has delivered stronger-than-expected trading, including solid progress on membership numbers and pricing, which has allowed management to lift guidance to slightly above the upper end of current market expectations for FY25 EBITDA. He also points to the company’s successful site rollout, with openings at the top end of guidance and plans to step up the pace further from FY26, supporting a clear multi‑year expansion plan.

In addition, Wheatcroft emphasizes the initiation of a new £10m share buyback and a balance sheet that remains comfortably leveraged, both of which reinforce management’s confidence in cash generation and capital discipline. He argues that the current valuation multiple for FY26 EV/EBITDA appears undemanding relative to the company’s growth profile and operational momentum, leaving room for re‑rating. Finally, he highlights The Gym Group’s strong competitive position and the sizeable remaining opportunity to add new sites in underpenetrated parts of the UK, which together provide a compelling medium‑term growth story for investors.