Swiss bank UBS has upgraded its investment rating on Purplebricks, raising its price target and urging investors to buy.
In a note to clients, UBS said it was shifting its guidance from ‘neutral’ to ‘buy’ and was raising its price target for Purplebricks shares to 100p.
This is the latest in a series of advice notes over the years from UBS, often in response to its concerns over the agency’s international adventures which have now ended.
In March 2019 UBS cuts its price forecast for Purplebricks’ shares from 305p to 285p but then just two months later in May that lower figure was slashed to only 100p.
By July 2019 UBS advised that it saw Purplebricks growing market share in the UK to only 7.5 per cent by 2024 - actually well below the agency’s own prediction of 10 per cent.
UBS made clear in 2019 that it was concerned at Purplebricks’ activities in Australia and America; 18 months ago the bank forecast that the agency wouldn't break even down under until 2022 and suggested that the US operation would not see a profit until 2025.
Of course since then Purplebricks has closed all its international operations, including most recently Canada.
Earlier this month the company revealed its trading statement covering the first half of 2020, reflecting the problems caused by Coronavirus.
There was an operating loss of £9.4m - much higher than the £1.5m loss a year earlier. Revenue plummeted 10.7 per cent to £80.5m.
At the company's financial year end - so before the sale of its Canadian business last month - it had £31m on the balance sheet, compared with £62.8m a year earlier.
The sale of the Canadian business contributed £30.6m to the agency’s coffers and the firm told its shareholders “our exits from the Australian and US markets have allowed us to concentrate on our key operations.”