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Investing.com - Berenberg has lowered its price target on Warpaint London plc (LON:W7L) to GBP5.10 from GBP7.00 while maintaining a Buy rating, citing cyclical market weakness that led to downgraded full-year expectations.
The cosmetics company now expects revenue for fiscal year 2025 between £107 million and £112 million, representing a 9% decrease from previous consensus estimates at the midpoint. Adjusted EBITDA is projected between £23.5 million and £25.5 million, 22% below prior consensus at the midpoint.
Despite the downward revision, Berenberg highlighted encouraging gross margin performance in the first half of 2025, which expanded by 250 basis points year-over-year. This improvement demonstrates management’s ability to generate margin expansion regardless of end-market conditions.
Berenberg believes the company’s revised expectations are "highly achievable" given that the updated half-year seasonality profile aligns with fiscal year 2024 patterns.
The research firm maintained its Buy rating on Warpaint London stock despite the lower price target, suggesting continued confidence in the company’s long-term prospects despite current cyclical challenges.
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