Halfords Group – finals this week should please the market, shares on 12.5 times pe, going down to 10 times
- Mark Watson-Mitchell
- 1 day ago
- 4 min read
Mark Watson-Mitchell - 22.06.2026
This Thursday, 25th June, will see the £391m-capitalised Halfords Group (LON:HFD), the UK’s leading provider of motoring and cycling products and services, declare a better-than-expected set of results for the year to early March.
Now being led by a new CEO, it is refocussing on its core retail and Autocentres business, and is showing early signs of improving end markets, leading the market to recently nudge up profit expectations.
The Business
Halfords is the UK’s leading provider of motoring and cycling services and products.
The group operates through its 370 Halfords stores, two Tredz Performance Cycling stores, 496 consumer garages and a network of 92 commercial fleet locations nationwide.
Its customers also have access to some 250 mobile service vans (trading as Halfords Mobile Expert and National) and around 550 commercial vans.
Customers can shop at halfords.com and tredz.co.uk for pick up at their local store or direct home delivery, as well as booking garage services online at halfords.com.
Through its subsidiary Avayler, Halfords also sells the group’s bespoke, internally developed software as a SaaS solution to clients in the USA and Australia.
The Latest Trading Update
On Wednesday, 29th April, the group issued a Trading Update for the year to Friday, 3rd April, reporting strong trading with the group’s FY26 profit expected to be around the upper end of expectations.
It anticipates that its financial year 2026 underlying profit before tax will be near the upper end of the £36.0m to £41.2m consensus range, driven by improved gross margins and cost management, with group like-for-like sales increasing by 4.8% overall, including 4.1% in Retail and 5.8% in Autocentres.
The company reported strong cash generation and a net cash position at the end of the period and is comfortable with FY27 underlying PBT expectations of £42.0m to £48.6m, benefiting from hedging strategies for energy costs and foreign exchange.
The Outlook And Profit Guidance
Along with the Update the group stated that:
“While the conflict in the Middle East is contributing to an uncertain macroeconomic backdrop, trading in March and April has been in-line with expectations.
The majority of FY27 energy costs and FX requirements are hedged with freight rates largely contracted in advance, supporting visibility and mitigating near-term volatility.
As a result, we are currently comfortable with consensus expectations for FY27 underlying PBT of £42.0m to £48.6m.”
Management Comment
CEO Henry Birch stated that:
“I am pleased to see the positive results that are starting to materialise from the ‘optimise’ phase of our ‘Fit for the Future’ strategy as we focus on driving operational excellence and strengthening our foundations for future growth.
This momentum further underlines the significant potential that exists within the Halfords business, and I look forward to sharing more detail on our progress at our full-year results announcement in June.
In the meantime, I want to thank the 12,500 trusted experts in our stores and garages who have played a critical role in delivering this performance.
They are the heart of this business and will continue to make Halfords the nation’s first choice for motoring and cycling, providing our customers with the helpful advice and service that keeps them moving day after day.”
The Equity
There are some 218.93m shares in issue.
The larger holders include Aberforth Partners (8.65%), Gresham House Asset Management (Investment Management) (7.77%), FIL Investment Advisors (UK) (7.51%), Jupiter Asset Management (5.00%), Livingbridge VC (4.37%), Dimensional Fund Advisors (4.24%), The Vanguard Group (4.13%), Janus Henderson Investors UK (3.84%), Aberdeen Investment Management (3.57%), Artemis Investment Management (3.05%), BlackRock Investment Management (UK) (2.70%), FIL Investments International (2.49%), and Norges Bank Investment Management (2.48%).
Broker Views
There are seven analysts closely following the group, four of whom rate the shares a Strong Buy, two hold a Neutral view, and the seventh rates them Sell.
The average Target Price is 188p, the Highest at 200p, the Lowest at 165p.
The consensus average estimate for the 2026 Trading Year is for £40.3m underlying pre-tax profits.
Then up to £45.3m for 2027.
With £50.7m being the average underlying PBT for 2028.
Canaccord Genuity rates the shares as a Buy, with a 170p Target Price.
Analyst Andy Hanson, at Zeus Capital, has a Buy note out on the group, with a 190p Target Price.
He concludes that with trading momentum building, cost well managed and a net cash position maintained – he views the risk/reward as increasingly attractive.
His estimates are for the end-March 2026 revenues to have risen to £1,798m (£1,715m), while adjusted pre-tax profits could come in at £41.4m (£38.4m), lifting earnings to 14.3p (13.2p), and a dividend of 9.0p (8.8p) per share.
For this current year, he looks for £1,867m sales, £48.6m profits, 16.0p earnings and a 9.2p dividend.
Into 2028 Hanson predicts £1,939m revenues, £52.0m profits, 17.1p earnings and a 9.8p dividend per share.
Halfords is driving momentum in both motoring and cycling says analyst Ben Hunt, at Panmure Liberum, who has a Buy out with a Target Price of 190p.
He noted that the first half trading momentum had accelerated into the second half against tough prior-year comparatives which in turn drove improved profit progression despite elevated labour costs.
Trading remains in line despite ongoing uncertainty around the consumer backdrop and management is comfortable with full-year 2027 guidance, implying more than 10% profit before tax growth.
“We continue to believe the motoring segment will benefit from the rollout of higher-margin Fusion garages, alongside growth in higher-spending Motoring Club members.
A recovery in cycling could also provide a near-term tailwind, with a new replacement cycle beginning to emerge.”
My View
The group’s shares have risen well from 125.20p at the end of March, hitting 194.80p two weeks ago.
Currently trading at around the 179p level, shares are on 12.5 times estimated historic earnings, then down to 11.1 times current earnings, with 10.5 times the 2028 estimates.
It is also worth considering the group’s very generous estimated dividend payments, 9p a share for 2026, 9.2p 2027, then 9.8p for 2028.
So, you have balance-sheet strength, ongoing growth, and healthy yields, too.
However, after such a good rise of late, the shares may well react when this Thursday’s results are announced – if that happens, you will see canny investors taking out lines of cheap stock.
On a programme of good corporate news, I can envisage the shares climbing over the 220p level fairly soon.
(Profile 23.06.26 @ 172p set a target Price of 200p plus)
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