Amid ongoing economic uncertainty, many analysts have reduced their forecasts on stock prices – but some companies still have huge growth potential even in tough times.
Here’s some British companies with more than 100% upside potential, according to the latest figures from TipRanks.
We have shortlisted advertising company S4 Capital (GB:SFOR), gaming giant 888 Holdings (GB:888), gifting company Moonpig Group (GB:MOON), and home products retailer Wickes Group (GB:WIX).
These stocks might be having a tough time right now, but the fundamentals are strong, and analysts believe in a turnaround in their share prices in the longer run.
We have used the TipRanks Stock Screener tool to shortlist these stocks and compare them.
S4 Capital Stock
S4 Capital is an advertising company led by the industry veteran Sir Martin Sorrell. The company provides its digital media and technology services in 32 countries across the world.
The company is going through a rough patch and trimmed its full-year earnings to £ 120 million. The company stated that the significant increase in hiring costs has hurt the profits, and it has stopped hiring for the remaining year.
However, analysts see light at the end of the tunnel. They believe the long-term growth is still intact, and the recent reporting issues faced by the company are relatively minor.
The S4 Capital target price is 394.0p, which has a huge growth potential of around 220% at the current price level. Four-star-rated analyst Thomas Singlehurst from Citigroup is highly bullish on the stock with a target price of 640p, which represents a 400% hike in the share price.
888 Holdings’ Stock
888 Holdings is a leading online betting and gaming companies, featuring casinos, sports, bingo, and poker games.
During the pandemic, people used their indoor time in playing online games, so the company’s stock surged. However, it has lost around 70% of its value in the last year.
The company and its competitors came under the radar of UK regulations for safer gambling guidelines, which has impacted revenues. Its half-year revenue was £332.1 million, compared to analyst expectations of £428 million.
The analysts believe that the company has some stable brands in its portfolio, and the recently closed acquisition of William Hill should push the top line. The stock looks like a risky choice at the moment, but considering the long-term prospects and the fall in the share prices, the opportunity can’t be missed.
The 888 stock forecast is 329p, which is around 172% higher than the current price level. The company has three Buy and one Hold ratings from analysts.
Moonpig Group Stock
Moonpig Group is a UK-based online gifting company, that delivers cards, flowers, and gifts mainly in the UK, the Netherlands, and Ireland.
The company’s stock lost the shine gained during the pandemic after its revenue started declining. The share price has fallen by 48% so far this year.
But the company’s full-year results for 2022 painted a picture of another successful year. Moonpig reported revenue of £304.3 million, a 75.8% increase from 2020.
Revenues were driven by growth in customers and order size. However, there was a 17.3% decline in revenue from last year due to the normalisation of COVID-induced sales.
Susannah Streeter, an analyst at Hargreaves Lansdown, said, “ The company is growing its online market share, and with 87% of revenue from existing customers, that loyalty will help Moonpig bring home some bacon, while it invests to try and attract new business.”
The MOON target price is 406.67p, which is 126% higher than the current level.
Wickes Group Stock
Wickes Group is a retailer supplying products for home improvement and gardening. The company owns more than 200 stores in the UK and is known for its DIY range.
The company, in its recently issued trading update for the six months ended in July, reported a 5.4% increase in like-for-like sales. On the flip side, it is facing headwinds with rising inflation and also lowered its profit guidance for the full year to £72-£82 million.
The company is confident in its local business growth, where it enjoys a leading position. Moreover, with the rise in residential construction in the UK, companies like Wickes will benefit.
The stock has fallen almost 50% in the last year, but the analysts have not lost hope and maintain a Strong Buy rating. The Wickes Group target price is 236.6p, which has an upside potential of 102%.
Wickes is also a great addition to passive income, as it carries a dividend yield of 9.18% as compared to the sector average of 1.65%.