Analyst Andrew Wade from Jefferies maintained a Buy rating on THG and keeping the price target at p55.00.
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Andrew Wade has given his Buy rating due to a combination of factors, primarily focusing on THG’s competitive pricing strategy and market positioning. The analysis highlights that Lookfantastic, a part of THG, offers significant value to customers, especially during high-traffic shopping periods like Black Friday. This is evidenced by Lookfantastic’s ability to maintain the lowest-priced basket compared to competitors such as Boots, Sephora, and Amazon, which indicates a strong competitive edge.
Furthermore, the report suggests that THG’s strategic brand relationships likely play a role in their favorable pricing, with supplier-supported promotions contributing to their market advantage. Despite the challenges of assessing inflation trends during promotional periods, the analysis implies minimal inflation impact on full-priced items, suggesting stable pricing. These factors collectively support a positive outlook for THG, justifying the Buy rating given by Andrew Wade.