A Couple of Analysts Hook Up Match With Very Bullish Upgrades

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A couple analysts have issued bullish calls on dating app operator Match Group Inc. (NASDAQ: MTCH), and its shares saw a handy gain on Monday. These calls come after social media giant Facebook launched its dating service. While increased competition—especially with Facebook—can be daunting, Match has seen an incredible year already, with its stock up about 75% year to date.

Deutsche Bank analyst Kunal Madhukar upgraded Match to Buy from Hold with a $91 price target, writing that recent headlines shouldn’t affect the company’s financials. Madhukar went on to say that he thinks shares have recently overreacted to Facebook Dating coming to the United States and to the Federal Trade Commission lawsuit against Match.

Nomura Instinet’s Mark Kelly upgraded the shares to Buy from a Neutral rating and raised the price target to $88 from $81. That implies upside of 18% from the most recent closing price of $74.43.

Kelly said that he sees upside to margins from platform fee removal at Match. Assuming Tinder receives about 40% of its revenue from Android users, Nomura is revising up its gross margins by 3% in 2020 and nearly 4% in 2021.

Nomura detailed in its report:

Emerging Brands Are Underappreciated: Match has highlighted a number of emerging opportunities in its brand portfolio, both expansions of existing brands to new geographies (particularly in Asia) and new brands focused on specific demographic groups or later relationship stages. We see a strong opportunity for Match to leverage its institutional knowledge and leading brand position in several key markets to expand its reach.

Shares of Match traded up about 3% to $76.95 on Monday, in a 52-week range of $33.30 to $95.32.


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