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On Wednesday, RBC Capital Markets adjusted its outlook on MONY Group (MONY:LN), a player in the price comparison website (PCW) market, by reducing its price target from GBP2.70 to GBP2.60. Despite the lower target, the firm maintained an Outperform rating on the company’s shares.
Wassachon Udomsilpa, an analyst at RBC Capital, emphasized the potential of MONY’s SuperSaveClub to foster customer loyalty, a key differentiator in the competitive PCW industry. Although SuperSaveClub is in the early stages, its impact on the company’s market positioning is considered significant.
The analyst noted that MONY Group’s financial performance remains sensitive to broader market dynamics, specifically in sectors such as motor and home insurance pricing, which are expected to stabilize. Additionally, there are indications of a recovery in the energy sector, which could benefit the company.
RBC Capital pointed out that MONY Group is currently trading at a 28% discount to its mid-term average Enterprise Value/Earnings Before Interest, Taxes, Depreciation, and Amortization (EV/EBITDA) multiple. This valuation is seen as not fully reflecting the underlying quality of MONY’s existing operations, nor the potential of SuperSaveClub.
In conclusion, RBC Capital reiterated its Buy recommendation for MONY Group, albeit with revised forecasts following the company’s preliminary results and Annual General Meeting (AGM) update.
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