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(Sharecast News) - Analysts at Berenberg hiked their target price on cosmetics group Warpaint London from 580.0p to 680.0p on Wednesday after the company delivered "significant" end-market outperformance and margin expansion in its interim report card.
Berenberg believes the strength of Warpaint's gross margin was the main feature of its H124 results, which it expects to drive upgrades to consensus.
"We see a considerable runway for further revenue growth and anticipate incremental margin expansion beyond the 334 basis point year-on-year that it delivered in H124," said the German bank.
"Our view of the sustainability of Warpaint's revenue growth is predicated on the further expansion of its store presence within its existing customer base - in which, we think Warpaint is significantly underpenetrated."
Berenberg, which reiterated its 'buy' rating on the stock, added that Warpaint currently trades on a 21.7x 12-month forward price-to-earnings ratio - one-half standard deviation above its long-run historical average.
Reporting by Iain Gilbert at Sharecast.com
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