ANALYST VIEWS: IS DEBENHAMS’ FORECAST REALISTIC?

CAROLINE GULLIVER| EXECUTION NOBLE

Debenhams’ guidance for the full-year looks as though profits, margins and debt levels are encouraging. Debenhams is the cheapest retailer in the sector, and we think the valuation does not give sufficient credit to the 20 per cent profit growth that will be achieved this year, or the continuing opportunity for gross margin improvements.

MATTHEW MCEACHRAN| SINGER CAPITAL MARKETS

‘Debenhams has issued a confident pre-close update The business looks well placed to continue implementing its differentiated strategy and international earnings are increasing in the mix. It seems likely that the shares will respond well to the update.

KEITH BOWMAN| HARGREAVES LANSDOWN

The group’s emergence from the critical list continues. A focus on profit margins as opposed to sales remains central to strategy, with the willingness of its banks to refinance a previously stretched financial position providing further momentum via reduced financing costs. Market consensus opinion continues to denote a ‘strong buy’.”