Barclays Upgrades Allegro to Overweight, Lifts Price Target 74%

Shares of Allegro rose Friday after Barclays upgraded the Polish e-commerce company to Overweight from Equal Weight, arguing that recent positive developments have strengthened its long-term growth prospects. The bank also raised its price target on the stock by 74% to 61 Polish zloty from 35 zloty, prompting a 2% rise in Allegro's shares in early trading.

The Analyst's Thesis

In a note to clients, Barclays called Allegro "a high quality asset with plenty of levers to grow well and monetise in the long term, with execution strong." The bank acknowledged it was slow to upgrade, having missed a series of positive developments over the past several months.

Barclays cited several key factors behind its revised outlook:

• The removal of a private equity overhang on the stock.
• Easing competition from Chinese platforms following changes to *de minimis* import rules.
• A favorably renegotiated logistics contract with InPost.
• Strong trading performance in the second and third quarters.

Revised Financial Outlook

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These factors led Barclays to increase its 2027-2028 EBITDA estimates for Allegro by 6-7%. Analyst Andrew Ross highlighted 2028 as a key year for valuing the company, expecting margins to inflect as better shipping terms take effect and the company's international operations approach EBITDA breakeven.

The new price target reflects a re-rating to 16 times projected 2028 earnings, compared to its current valuation of 12 times. The bank also raised its 2026 estimates for gross merchandise value (GMV) by 2% and EBITDA by 3%, and its 2027 GMV and EBITDA forecasts by 4% and 7%, respectively.

Scenarios and Catalysts

While near-term catalysts appear limited, Barclays noted that fourth-quarter results in March should provide an update on medium-term targets. In an upside scenario, the bank sees a potential valuation of 78 zloty if GMV growth accelerates and the company makes progress on its fintech and services strategies.

Conversely, a downside scenario involving a macroeconomic slowdown or renewed competition could see the stock fall to 33 zloty. Key risks flagged by the analyst include a slowdown in the Polish economy and the possibility that import surcharges on Chinese goods become less impactful over time.