Shares in beleaguered e-commerce firm THG rallied today following a difficult two weeks which has seen shares plummet to nearly 84 per cent below their initial flotation price.
THG surged as much 12.5 per cent this afternoon before falling to close 8.25 per cent above their opening price.
The rally follows broker RBC bucking the negativity against the firm yesterday and upgrading it to ‘outperform’, despite a slide that has seen shares fall more 60 per cent in the last three months.
The Manchester-based firm, which runs brands including MyProtein and Cult Beauty, has faced an investor exodus after reporting last week that 2021 profit margins would be squeezed more than expected, and sales would see a slump at the start of this year.
Shares were sent into a further spin on Monday after Citi, one of THG’s brokers, revised its profit forecasts for the year down from £177m to £164m, and it emerged boss Matt Moulding’s mother had rounded on a journalist for not appreciating her son’s achievements
But analysts urged caution over the rally today. Victoria Scholar, head of Investment, interactive investor, told City A.M it “pales into insignificance” when compared to the more than 80% crash in the shares from the September high.
She said: “Shares have plummeted from their 52-week high at 762p and are now trading just 11 pence above the 52-week low.
“After a volatile few sessions for markets, a relief rally provided a tailwind for THG today. However yields, inflation and interest rates on the rise, there could be further downside for the shares in the months ahead, particularly if the tech-heavy Nasdaq stateside continues to come under pressure.”