Jefferies Maintains 'Buy' Rating for Westwing, Sets Price Target at €12

Analyst Stays Bullish on Home & Living E-commerce Company

Investment bank Jefferies has reiterated its 'Buy' rating for Westwing, a leading European online retailer for home and living products. The bank has also set a price target of €12 for the company's shares, indicating a potential upside of over 20% from the current market price.

Strong Fundamentals Drive Positive Outlook

Jefferies' continued bullish stance on Westwing is based on the company's strong fundamentals. Westwing has consistently reported solid financial results, with revenue growing by 25% in the first half of 2023. The company's gross margin has also improved, driven by successful cost-cutting initiatives and a shift towards higher-margin products.

Growing Market Share and Expansion Opportunities

Jefferies believes that Westwing is well-positioned to continue growing its market share in the rapidly expanding European home and living e-commerce market. The company's unique offering, which combines curated product selection with a strong customer focus, has resonated with consumers. Westwing is also actively expanding into new markets, with recent launches in Poland and the Netherlands.

Valuation Attractive Compared to Peers

Despite its strong performance, Westwing's valuation remains attractive compared to its peers. Jefferies' price target of €12 implies a forward price-to-earnings ratio of 15x, which is below the average for the sector. The bank believes that this undervaluation presents an opportunity for investors to acquire a high-quality growth stock at a reasonable price.

Risks to Consider

While Jefferies maintains a positive outlook on Westwing, it acknowledges some potential risks. These include increased competition from both established players and new entrants, as well as economic headwinds that could impact consumer spending. However, the bank believes that Westwing's strong execution and differentiated offering mitigate these risks.

Conclusion

Jefferies' 'Buy' rating and €12 price target for Westwing reflect the bank's confidence in the company's long-term growth prospects. Westwing's strong fundamentals, growing market share, and attractive valuation make it an appealing investment opportunity for investors seeking exposure to the European home and living e-commerce market.