Majestic Wine’s shares fell on Friday as Canaccord Genuity reiterated a ‘sell’ rating and cut the target price to 290p from 350p.
The company last Wednesday issued a profit warning, saying it had been hit by the costs of a failed marketing campaign for its Naked Wines business in the US. Majestic said weak growth in its commercial division, which sells wine to businesses, had also weighed on results.
“Majestic Wine delivered an unwelcome downgrade of £4m to fiscal year 2017 pre-tax profit expectations, equating to a around 25% cut to previous consensus forecasts,” Canaccord said.
“Despite the company's understandable attempts to reassure investors on the progress in all other parts of the business, the fact that the two culprits - commercial and Naked USA - have been positioned as growth drivers is clearly a source of considerable disappointment.”
Canaccord said while management has been targeting double digit growth in commercial, gross margin of 200 basis points in the year to date has seen the top line resolutely flat. As a result, Majestic said this will deliver a £2m hit to earnings before interest and tax in the rest of the year.

Peel Hunt today downgrades its investment rating on Majestic Wine PLC (LON:WINE) to hold (from buy) and cut its price target to 350p (from 500p).

Liberum Capital today downgrades its investment rating on Majestic Wine PLC (LON:WINE) to hold (from buy) and cut its price target to 360p (from 535p).