Broker tips: Hollywood Bowl, IntegraFin

(Sharecast News) - Peel Hunt upgraded its stance on Hollywood Bowl on Wednesday to 'buy' from 'add' following recent share price weakness. It noted that over the 15 weeks to 12 January, like-for-like sales increased by 4.5% in the UK and 14.2% in Canada. In the UK, pricing has been rising at a compound annual growth rate of 1-2% since 2019, during which sales and post-central EBITDA (IAS 17) per outlet have both risen by 35%, Peel Hunt said. It also estimated that the relative cost of bowling at Hollywood Bowl has fallen to half the leisure sector average.

"Labour remains the largest source of cost inflation," said the broker. "However, utility costs are hedged until the end of 2027, and exposure to food and drink costs is limited, making non-labour costs reasonably certain.

"Forecast changes should be driven by sales, where we see upside potential, supported by the strength of new openings. Additionally, 1Q trading was ahead of our full-year forecast assumption of 1.3% and the company's 3% target (2% spend; 1% volume)."

Peel Hunt itexpects net debt to decrease from £29m to £11m this year, following £40m of capex, £28mcof dividends, and £10m of share buybacks. "We anticipate LFL sales momentum to be the primary driver of forecasts and the share price," said the broker, which maintained its 340p price target.

Analysts at Berenberg lowered their target price on investment platform operator IntegraFin from 400.0p to 380.0p on Wednesday on the back of its Q225 update on 14 April.

Berenberg noted IntegraFin's net inflows came in ahead of consensus expectations, with flow momentum remaining "strong", in its view, as net flows having rose for a third consecutive quarter. IntegraFin highlighted that H125 group revenue was expected to be roughly £77.0m, a 9% increase year-on-year.

However, while flows were strong, Berenberg noted that funds under direction were broadly flat quarter-on-quarter owing to negative mark-to-market movements.

The German bank added that given the impact of US tariff announcements on markets, it now expects the start of Q325 to also be affected by negative market movements.

"We reduce our FY25 EPS estimate by c5% and FY26-27 estimates by 8-9%. This is primarily driven by lower average FuD as a result of mark-to-market movements, partially offset by slightly higher flow assumptions," said Berenberg.

The analysts also reiterated their 'buy' rating on the stock and noted that IntegraFin trades on 19x their updated FY25 earnings per share estimates.