Bernstein analyst Luca Solca thinks so, as long as the retailer adopts a cash-focused strategy. Product range extension, efficiencies, sale and leasebacks, and share buy-backs are the foundations of the broker’s alternative strategy. Solca is not a fan of M&S’s internationalisation, which is likely to be “fraught with issues”, he said.
The poor performance of Home Retail Group’s Homebase chain was seen as negative for DIY rival Kingfisher. Pali reiterated its sell advice and said: “We think there is plenty of disappointment to come from the UK for Kingfisher.”
Earlier in the week, Kingfisher boss Ian Cheshire presented to house broker Credit Suisse. The broker, neutral, said: “There will clearly be short-term challenges, notwithstanding his view that they have prepared for tough market conditions in the UK.”
Carphone Warehouse was up, as speculation that a break-up was on the cards did the rounds. Vodafone and US retailer Best Buy – which has a partnership with Carphone already – were once again in the frame to buy all or part of the business.
Game generated record preliminary profits of£75.5 million, up 156 per cent, on sales up 86 per cent to£1.49 billion. Like-for-likes soared 41.2 per cent.
Buy, advised KBC Peel Hunt. Short-selling and profit-taking may push the shares down, but the broker said: “Given worldwide evidence of the strength of the video games cycle, Game is likely to continue to outperform this calendar year, with volatility presenting buying opportunities.”
Buy Dunelm, urged Landsbanki, a longstanding bull on the stock. Dunelm recorded a like-for-like rise of 3.9 per cent in the first 17 weeks of the second half. Landsbanki said the retailer’s value positioning, low transaction value and low operational gearing were among the reasons why it should ride out tough trading conditions and has a price target of 220p.
Fashion e-tailer Asos’s pre-close update impressed Kaupthing. Sales soared 90 per cent last year and the business continues to grow. Ahead of the announcement there had been hopes of upgrades, which did not materialise. Kaupthing said: “The shares could drift back on disappointment, but any weakness would present a great buying opportunity for new investors.”
No comments yet