HelloFresh: Environment gets increasingly tougher – PT down, but remains a BUY

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HelloFresh’s stock is having a tough time, like most internet retail stocks. But aside from a weak market, companies that benefitted from the pandemic are facing more headwinds. In HelloFresh’s case, not only higher input costs should pressure margins, but also customer acquisition costs. With the environment getting tougher due to high inflation and decreasing consumer sentiment, we now expect consumer demand to decline. We think that it’s only a matter of time, until HelloFresh downgrades its outlook. Considering the macroeconomic environment and decreasing consumer sentiment, we are expecting more headwinds, especially on the bottom line due to inflations as well as marketing and logistic costs. Furthermore, we incorporate higher interest rates in our model. Overall, this yields a lower PT of EUR 45.00 (old: EUR 58.00). But, after the weak share price performance our rating remains BUY.

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