Currys (LON:CURY) – Windows 10 going out of support could drive a lot more business

28.082025

In a note out this morning from Panmure Liberum its analysts Wayne Brown, Ben Hunt and Anubhav Malhotra have reiterated their Buy rating on the electrical retail group’s shares, with a Target Price of 180p.

That compares to the current 112p, so it continues to offer big upside potential in buying the shares.

They state that:

“Currys stands out down the P&L and up the B/S – it now has cash on the B/S, has recovered to a group EBIT margin of 3% and we see the potential to increase this further as its strategy starts to drive incremental growth.

FCF conversion has improved, and we see potential here for FCF to rise by c.70% over the next two years.

This would result in sector leading margins, and thanks to a negative w/c model and high stock turn, drive sector leading FCF (not withstanding current levels are compelling to the broad peer group).”

In considering the group’s growth drivers over the next few years the analysts see some main points centred around its computing side covering PCs and Gaming.

The brokers note that we are now five years on from the pandemic, and it is expected that replacement cycle of PC machines bought during lock-down is likely to start building.

Of greater importance is the fact that Windows 10 is going out of support in the Autumn, which could certainly trigger new computing requirements.

For the current year to end April 2026 Panmure Liberum is estimating a small lift in group sales to £8,812m (£8,706m) with a slight increase in pre-tax profits to £164.5m (£162.0m), generating 11.4p (11.3p) in earnings but paying a hike-up dividend of 2.2p (1.5p) per share.

For the 2027 year, they look for £9,022m sales, £181.3m profits, with 12.6p of earnings and a 2.4p dividend per share.

Another lift is anticipated in the year to end-April 2028, they see £9,203m sales, £191.8m profits, 13.3p earnings and paying out a 2.5p per share dividend.

It is well worth noting that the £1,267m-capitalised group, is carrying an estimated end-year cash balance of £140.6m net cash for 2026, with a raise to £159.5m cash in 2027, then up to £182.8m in 2028.

My view is that the shares of Currys remain an absolute bargain at the current 112p, especially when you look elsewhere around the market and continue to see so much over-rated valuations on debt-balance sheets.

(Profile 10.07.23 @ 49p set a Target Price of 61p*)

(Profile 18.12.23 @ 50.05p set a Target Price range of 61p-65p*)

Asterisks * denote that Target Prices have been achieved since Profile publication.