Future's stock has further to run, says JPMorgan

(Sharecast News) - JPMorgan has recommended keeping an 'overweight' position in shares of Future despite the huge jump in the British publisher's stock over the past year, saying the investment case is still "compelling" at these levels. "With CEO Jon Steinberg at the helm for just over one year, we see clear signs that Future's Growth Acceleration Strategy is bearing fruit on underlying performance, at a time when the tide is turning on end markets with green shoots of recovery in digital advertising," the US bank said.

Ahead of Wednesday, shares in the magazine and online publishing group had already gained 43% over 2024 so far, but remain 71% lower than its highs seen in 2021.

JPMorgan said the current valuation - with an enterprise value-to-EBITDA ratio of just 5.5 - reflects earnings risk and "lingering concerns on portfolio resilience, amid a higher-for-longer rate environment".

"[At the current valuation], the market subscribes little value to Future's B2C and B2B assets, while disregarding optionality on Go.Compare. As a next step, we see Future's equity story increasingly aligning to its sum-of-the-parts with management actively flagging optimising the portfolio as an additional step to create value," the bank said.

JPMorgan said Future's new structure should enable "strategic flexibility", paving the way for a potential sale of Go.Compare, which the bank values at £740m.

JPMorgan has a 1,464p target price for the stock, which was up 1.6% at 1,132.97p by 1135 BST.