Moneysupermarket.com (MONY) 246p

Gain to date: 41%

Website comparison company Moneysupermarket (MONY) received a potential boost this week after energy group OVO launched a 12-month fixed deal for customers, set 9% below the government’s energy price cap. This effectively kick-starts the return of the energy switching market.

It follows a two-thirds decline in gas prices since the peak last summer and introduces the prospect of increased competition in the energy market and additional revenues for Moneysupermarket.

At the full-year results (16 February) management said it didn’t expect switching in the energy market to make a return in 2023 so the latest development represents a positive surprise and should support the shares.

Consumer money saving expert Martin Lewis cautioned against jumping into fixed deals, without considering the chances prices will continue to fall. ‘It’s likely the price cap will drop, and on current predictions that means you’ll start paying 20% lower rates than now,’ Lewis told the BBC.

Shares in Moneysupermarket.com were trading at multi-year lows when we said to buy last May. Today they are trading at new 12-month highs driven by renewed interest from consumers
looking for the best deals to cope with the cost-of-living crisis.

WHAT HAS HAPPENED SINCE WE SAID TO BUY?

Double-digit food inflation and the rising cost of mortgages due to higher interest rates provides a fertile ground for consumers to remain active in price comparison.

Rising interest rates have resulted in more product choice for consumers to earn a decent return which is reflected in a 37% increase in revenues from Moneysupermarket’s money channel over the year. Likewise, a continued recovery in travel saw channel revenues jump 265% year-on-year.

WHAT SHOULD INVESTORS DO NOW?

The potential return of energy switching provides a positive boost to the business which was already back to profitable growth in 2022.

Analysts currently forecast 6% growth in revenues to £411 million and 17% growth in earnings per share to 14.9p, according to Refinitv data.

With the shares trading on a 4.9% dividend yield and the prospect of earnings upgrades, we maintain a positive view.

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