GMG received a rare broker downgrade on Monday. UBS cut it to a Sell with a price target of $31.71, around 9% below Monday’s close. Despite their positive outlook on the company’s strategy, UBS has expressed concerns over the current market valuation. GMG is perceived to be trading at a premium to the likely earnings growth, or in simple terms, the good news is already priced in. Interestingly, UBS lifted its forecast for the company’s earnings at the same time, anticipating an average 5% increase from fiscal year 2025 to 2028, making it a buy-the-dip play in our view.
- We cannot argue with UBS’s thought process as we have been considering trimming, not cutting, our GMG position—MM is long GMG in our Active Growth Portfolio.
- This reminds us of AI giant Nivida (NVDA US), which recently corrected 16% even though AI, like data centres that have driven GMG’s share price, is still booming.
MM is long and bullish towards GMG
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