Canaccord Genuity lowers target price on Ultimate Products

(Sharecast News) - Analysts at Canaccord Genuity lowered their target price on Ultimate Products from 182.0p to 130.0p on Monday, noting that "challenging UK conditions" had persisted. Canaccord Genuity said Ultimate Products' H125 trading update showed that whilst it has continued to see "good growth in Europe", the performance in the UK has remained "challenging" due to weaker consumer demand for general merchandise.

The Canadian bank also noted that a softer-than-hoped peak trading performance by some of Ultimate Products' customers had also impacted short-term sentiment resulting in a moderation in the pace of forward orders.

As a result, Ultimate Products now expects FY25 revenues to be broadly flat year-on-year, with FY25 adjusted underlying earnings expected to be in the range of £14.0m-16m.0, short of consensus estimates of £20.6m, due to the one-off H125 effect of £2.0m additional freight costs.

"The challenging UK consumer backdrop has been well-documented, as evidenced by a number of the retail sector trading updates over recent weeks and the sharp fall in consumer confidence; however, we continue to believe that ULTP is well-positioned to benefit from an improved consumer environment in the UK as and when underlying macro conditions improve," said Canaccord, which has a 'buy' rating on the stock.