Back in the FTSE 250, THG shares are rising as JP Morgan issues upbeat note

As THG returns to the FTSE 250 today (24 September 24), the online retailer has received further support with JP Morgan upgrading its outlook on the back of positive half-year results.

The financial services giant has raised THG’s stock from Underweight to Neutral, sparking a 4.5% increase in the retailer’s share price on Tuesday.

A Neutral reading predicts the stock will perform in line with the market while Underweight means it expects the stock to perform worse than the overall market.

The raise comes after a surge in THG’s valuation in recent weeks, giving the firm a market capitalisation of £532 million on the back of positive half-year results.

However, the current share price and market-cap remain well down from THG’s IPO valuation of £5.4 billion in 2020.

In an analyst note, JP Morgan said: “We see the tide turning post a period of strategic evolvement.

“Having been sceptical on the equity story for past three years, and maintaining our UW (Underweight) through the last two, we close our cautious stance on THG and upgrade to Neutral, with the share price having meaningfully corrected over the period, while at the same time we see first signs of improved performance following a period of extensive strategic evolvement”.

It noted that “operationally, trading momentum is building” with the business benefitting from an enhanced business model in both Beauty (disposal of certain operations, own-brand investment and retail territory prioritisation) and Nutrition (Myprotein rebrand, offline retail expansion and Asia model evolution) which we see setting up for sustainable and accelerated growth into year-end and FY26.

“Strategically, the THG Ingenuity demerger has focused management on core operations, and together with recent disposals (Claremont), asset optionality and cash generation (£28m FCF in FY26E), we see an improved balance sheet position and path to net cash in FY29E”.

At the start of 2025, THG demerged its loss-making Ingenuity technology arm, while in August it sold Claremont Ingredients to Nactarome Group for £103 million to reduce its debt.

The sale prompted speculation that CEO Matt Moulding will look at further disposals  to reduce net debt to zero, reports also said.