- Summary:
- The Hut Group share price has made a steady recovery in the past few weeks as investors continue pricing in an acquisition
The Hut Group share price has made a steady recovery in the past few weeks as investors continue pricing in an acquisition of the embattled company. The THG stock price is trading at 110p, which is substantially above the lowest level this year at 70.30p. Its current price is the highest it has been since February 2022. It has risen by about 58% from its lowest point on March 7th.
THG has been in a strong bullish trend after the company announced that it had rejected an acquisition offer from unstated companies. The firm said that the bid severely undervalued the company in a statement.
In a statement, Matt Moulding said that the board had“concluded that each and every proposal to date has been unacceptable, failing to reflect the fair value of the group, and confirms that THG is not currently in receipt of any approaches”.
The TGH share price has also risen after the company published encouraging financial results. It said that its revenue rose by 35% to 2.2 billion pounds. As a result, its adjusted earnings in 2021 rose by 7% to 161 million pounds. In addition, the firm said that its revenue rose by 16% to 520 million pounds in the first quarter. At the same time, the company said that its sharp increase in costs was likely temporary. Therefore, there is a likelihood that the stock price will keep rising in the coming months as speculations of a higher bid rise.
The Hut Group share price forecast
The four-hour chart shows that the TGH share price has been in a strong bullish trend in the past few weeks. This price action is in line with what I predicted before. It has formed an ascending channel pattern that is shown in black. It is also slightly above the 25-day and 50-day moving averages, while the Stochastic Oscillator moved above 50.
Therefore, while the overall trend is bullish, there is a likelihood that the stock will retreat to a low of 91p, which is along the lower side of the channel. A move above the resistance at 120p will invalidate this view.
