E-commerce shift to boost Westwing and Home24, Jefferies starts with 'buy'
17/11/2021 07:48
** Jefferies starts German home furnishings e-commerce
platform operators Westwing WEW.DE and Home24 H24.DE with
"buy" and a PT of EUR 45 and EUR 23 respectively
** With the ongoing shift towards online and tailwinds from
the pandemic, the broker expects Westwing to benefit from its
unique positioning that combines its digital interior design
magazine with an e-commerce platform
** On the other hand, it sees Home24 to gain from its
curated assortment for mass market that sets it apart from
players such as Westwing, which focus more on distinct customer
groups
** Both companies' online penetration of about 14.1% should
increase to around 19.4% in 2023 as a result of wider product
offerings, higher convenience, more digital natives and
increased habituation, the broker says
** It expects a sales compound annual growth rate (CAGR) of
about 18% for Westwing and of around 20% for Home24 until 2025
** It sees adj. EBITDA margin in both companies to gradually
increase from 2022 to 2025, as supply chain constraints cease
while the companies scale up further
** The broker highlights the companies' strong balance
sheet, which allows several strategic options for Westwing and
revenue growth focus for Home24
** Shares in Westwing and Home24 are up 4.9% and 3.8%,
respectively, in early Frankfurt trade
(Reporting by Linda Pasquini in Gdansk)
((Linda.pasquini@thomsonreuters.com))