Ahead of interim reports on 18 September, Singer Capital has moved JD Sports back onto its “buy” list from “fair value” with a target price of 790p. The broker expects a fall in profits before tax from £16m to £2.4m after the company absorbed Blacks at the start of the year, but has confidence in management to restore profitability. It also sees international expansion of the core business as a driver of the investment case.
Numis has raised its target price on the equipment hire group from 293p to 380p and maintained its “buy” rating on the stock, saying the firm’s first quarter numbers reinforce the point of structural change in the industry. With rental trends growing in the US the firm is doing well despite weak economic and construction trends, says Numis. The broker has raised its full year outlook by 15 per cent.
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UBS has upgraded the Argos-owner from “neutral” to “buy” with a target price of 97p, saying that if Argos can produce broadly stable like-for-like sales in its second quarter, then its long term sales decline will start to look more like a cyclical trend than a structural problem. It also expects new managing director John Walden to address any remaining structural issues, but says the firm would benefit from further recovery in the UK consumer.