Canaccord Genuity lowers target price on Ultimate Products

(Sharecast News) - Analysts at Canaccord Genuity lowered their target price on homeware brands specialist Ultimate Products from 130.0p to 80.0p following its Wednesday morning profit warning.

Canaccord Genuity said Ultimate Products' trading update flagged that "challenging trading conditions" had continued across H225, resulting in lower FY25 revenue and profit expectations.

"Heightened macro uncertainty following increased tariffs is causing customer caution and lower forward orders which prompts us to take a prudent approach to FY26 forecasts," said the Canadian bank.

However, Canaccord also noted that while the consumer backdrop "remains fragile" and was impacting Ultimate Products' near-term performance, it also management "clearly has a plan" to improve its medium-term sales performance to help mitigate macro conditions, which along with the growth opportunity in mainland Europe meant that the longer-term growth opportunity remains.

Canaccord Genuity, which reiterated its 'buy' rating on the stock, reduced FY25 adjusted underlying earnings forecast by 14% to �12.5m, whilst adjusted pre-tax profit estimates were reduced by 20% to �8.9m.

"We have taken a prudent approach to FY26 forecasts and believe any self-help driven improvement to the topline as a result of initiatives underway and a reversal of the FY25 gross margin decline could provide upside to forecasts," said Canaccord.

Reporting by Iain Gilbert at Sharecast.com