Shore Capital Markets has highlighted that Vanquis Banking Group's shares have fallen almost 40% since the day before its third-quarter profit warning, leaving the stock trading on a forecast 2026 price-to-tangible-net-asset-value multiple of just around 0.3 times.
The UK specialist consumer credit provider, which lends through credit cards, vehicle finance and second-charge mortgages, warned last week that worsening credit performance in its cards business, driven by higher individual insolvencies rather than a marked deterioration in delinquencies, had pushed up charge-offs and IFRS 9 provisions.
Shore Capital, which currently has its rating 'under review', after the broker pulled its recommendation pending clarity on the turnaround.
In a new note, Shore Cap analyst Gary Greenwood has substantially cut his forecasts to reflect management's guidance, which was reduced for the third time to a negligible statutory return on tangible equity in 2026, low-single-digit in 2027 and low-double-digit in 2028.
Even so, Greenwood believes the subsequent de-rating "now discounts an extremely adverse outcome" for the business.
Greenwood's caution persists, with the analyst citing that confidence in the turnaround's delivery "remains low".
Vanquis had previously guided to a low double-digit statutory return on tangible equity for 2026 as recently as its first-quarter update in May, before the October profit warning tore up that trajectory alongside guidance for 2027 and 2028.