Original-Research: Marley Spoon Group SE (von NuWays AG): BUY

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Original-Research: Marley Spoon Group SE - from NuWays AG

Classification of NuWays AG to Marley Spoon Group SE

Company Name: Marley Spoon Group SE

ISIN: LU2380748603

Reason for the research: Update

Recommendation: BUY

from: 12.03.2024

Target price: 8.00

Target price on sight of: 12 Monaten

Last rating change:

Analyst: Mark Schüssler

HelloFresh's weak outlook reflected MSG's market est.

Topic: Last Friday, Marley Spoon's (MSG) close peer HelloFresh (HFG)

released a weaker-than-expected outlook for FY24 and withdrew its FY25

(mid-term) targets on the back of particularly challenging end markets,

triggering a 40-50% sell-off of the stock. Importantly, the weak end market

sentiment should be fully reflected in our and market expectations for MSG.

What happened in detail: HFG had issued its midterm (FY25) targets of EUR

10bn in revenue and EUR 1bn in operating earnings during a time in which

consumer sentiment generally and the meal kit market particularly were

still upbeat with strong growth, apparently failing to temper consensus'

expectations regarding the Group's ability to deliver on these goals in the

presently challenging macroeconomic environment. As a result, withdrawing

the midterm targets altogether along with a muted FY24 guidance of EUR

7.75-8.20bn in revenue (2-8% yoy) and adj. EBITDA of EUR 350-400m (between

-11% and -22% yoy) caught investors flat-footed. Investing heavily in

performance marketing and brand maintenance, the company cited higher

customer acquisition costs as the main driver for lower prospective adj.

EBITDA along with increased expenses for production capacity and ramp-up of

two newly added fulfilment centres.

What this means for MSG and our estimates: In our view, this is no

incremental negative news for Marley Spoon as our current top and bottom

line estimates already reflect a challenging end market environment. To a

considerable extent, the negative expectations regarding the meal kit

market in FY24 have already been priced in MSG's stock after the company

posted a revenue decline of -18% in FY23, leading investors to adjust their

forward expectations accordingly.

We currently expect MSG's organic sales to grow by 5.2% - and thus at the

midpoint of HFG's guided FY24 revenue growth - to reach EUR 346m, aided by a

lower revenue base and a rectified voucher strategy which has already

improved marketing efficiency and early cohort retention rates since Q4'23

and should likely help to lift subscriber quality, order frequency as well

as basket size, going forward. In line with HFG's statement regarding the

beginning recovery of the meal kit market, active subscribers are seen to

grow by 3% yoy to 195k after having dropped by 24% from 249k in FY22 to

189k in FY23.

Marley Spoon Group remains attractively priced trading at only 0.32x

EV/Sales 2024e, leading us to reiterate our BUY rating with an unchanged PT

of EUR 8.00 based on DCF.

You can download the research here:

http://www.more-ir.de/d/29111.pdf

For additional information visit our website

www.nuways-ag.com/research.

Contact for questions

Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden: www.nuways-ag.com/research.

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: research@nuways-ag.com

LinkedIn: https://www.linkedin.com/company/nuwaysag

Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.

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The result of this research does not constitute investment advice

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