** Shares in HelloFresh HFGG.DE jump around 7% after Morgan Stanley upgraded the German meal-kit delivery firm to "overweight" from "equal-weight" citing the growth potential of its ready-to-eat proposition, Factor
** The broker says itbelieves the market undervalues the potential for the U.S.-based ready-meals business, which was acquired by HelloFresh in 2020 and became a core growth driver for the company
** Factor has captured >50% of the U.S.ready-to-eat market and its recent launch in Benelux markets marks the start of the European leg of growth, MS says
** The broker forecasts Factor revenues growing 33% y/y in 2024, 29% in 2025, and doubling to 2 billion euros by 2027
** Putting Factor on 10 times EBITDA on 2025 equates to 9 euros per share or 1.5 bln euros fair value, MS says, adding that at current valuation levels, it believes the market cap can be well supported by Factor alone
** It notes risk ofrising acquisition and retention costs, but thinks that easing comps into 2024, following the post-Covid reversion, could support stabilization in core actives
** Out of 23 analysts that cover Hellofresh, 11 rate the stock "strong buy" or "buy,"? five rate it "hold" and seven? rate the stock "strong sell" or "sell"
Potentieel voor factor is enorm volgens Morgan Stanley.