Yesterday analyst Adam Tomlinson at Berenberg declared that Currys is at an ‘inflection point’ with dividends about to resume and that its shares are a Buy.
In reaction to him upping his Price Objective, from 92p to 125p, they rose 9% to 85p.
The analyst noted that the Currys’ turnaround plan has cut total indebtedness by more than £700m over full-year 2019-24 and delivered April 2024 year-end net cash of £96m.
He considers that with financial discipline, a clear strategy and right-sized cost base, the company will continue to support normalised capex levels to drive growth.
He is also forecasting that the group’s pension deficit will be eliminated in 2027 which will drive a step-up in free cashflow to equity to £100m in the year, rising to £150m a year thereafter.
It was interesting to note that a number of the group’s professional investors have recently reduced holdings.
However, I take the view that they may well have sold down too early.
At the current 85p, the shares still offer some very useful upside as Management plans continue to show rewards.
(Profile 10.07.23 @ 49p set a Target Price of 61p*)
(Profile 18.12.23 @ 50.05p set a Target Price of 61p-65p*)
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