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Taken from advfn. Thanks. Liberum is an outrider on price, but like the rest reaffirming a buy recommendation.
: Attractive Wickes is a ‘winner’
Wickes (WIX) will continue to be a winner in the ‘structurally attractive’ DIY market, says Liberum.
Analyst Wayne Brown retained his ‘buy’ recommendation and target price of 425p on the stock, which was trading up 2.7% at 199p on Thursday afternoon.
The company reported a strong trading update for the first 20 weeks of the year, although like-for-like sales were down 0.6% against a ‘tough comp’ versus a buoyant start to last year and a normalisation of DIY demand post-pandemic.
‘The company has reaffirmed full-year guidance of “further progress in the year ahead”,’ said Brown.
‘We believe Wickes will continue to be a winner in a structurally attractive repair, maintenance, and improvement market supported by its well-placed offer across trade, DIY, and do-it-for-me and significant self-help levels.’
He added that the shares trade on a 2022 price/earnings ratio of 7.3x and are ‘attractively priced’.
Analysts at Investec and Peel Hunt have both maintained their buy recommendation for the company, which they estimate will earn revenues approaching £1.6billion and underlying earnings around the £220million mark this year.
Some views. Nothing new.
https://capital.com/wickes-was-the-demerger-a-success
It simply doesn't matter, they are making good money and paying dividends, eventually the market will understand the true value of these shares. "Everything comes to he who waits".
The more time passes the less sustainable my argument becomes - yet there may still be legacy Travis Perkins sellers despite no holdings RNS. But there were several holders under 3%.
I cribbed these broker comments from advfn. Thankyou.
Liberum
Mar 25, 2022 11:15 AM GMT
Wickes Delivers Strong 2021, Shares Look Cheap
Wickes 2021 results were very strong, and its shares still look far too cheap for the value on offer, Liberum says. The home-improvement retailer's current share price fails to reflect the quality of the business and its valuation creation opportunities, the brokerage says. Wickes has raised pretax profit guidance by 5% for 2022, dividends are up with the payout higher than forecast, and capital allocation is an exciting split between investing in faster growth and market share gains, and return excess cash to shareholders, Liberum says. The brokerage retains its buy rating and target price of 450.0 pence on the stock. Shares are up 6.3% at 183.4 pence.
Berenberg
Wickes is too cheap, says Berenberg
Shares in building materials and DIY group Wickes (WIX) are ‘simply too cheap’, according to Berenberg.
Analyst Thomas Davies retained his ‘buy’ recommendation but lowered the target price from 290p to 280p on the stock, which closed up 1.9% at 183p on Monday.
Full-year 2021 profits for the group came in ahead of expectations. However, for Davies the key focus was the outlook.
‘While the UK consumer outlook faces increased challenges, Wickes’ exposure to do-it-for-me and local trade customers should support estimates,’ he said.
‘We expect improved sales densities and self-help opportunities to underpin profits, and we expect free cashflow improvements to support capital returns.’
Although estimates are up, Davies lowered the target price to reflect lower peer multiples and higher-than-expected capital expenditure on the horizon.
‘However, with the shares trading on c.7x price/earnings, they are simply too cheap,’ he said.
Peel Hunt.
“Despite much-publicized pressure on consumers, revenue in the first 11 weeks of the year matched those in FY21, Wickes expects to make further progress in FY22, and pretax profit estimates are likely to increase by at least 5%, Peel Hunt says. "Looking further out, the store-investment program has been accelerated and management sees scope for a further 20 store openings over the next five years or so, both of which should help to support the top line. The shares remain severely under-priced," Peel Hunt says.’
28-Mar-22 Berenberg Bank Buy (290.00) 280.00 Reiteration
28-Mar-22 Deutsche Buy 320.00 Reiteration
Deutsche reiterate buy 320p - again.
There is a backlog of work going through this first half anyway. I read final results will be out next month - we’ll see what they have to say for themselves.
Obviously these like kingfisher have had above normal profits with change in habits but I think we will still see a robust year again maybe up to 10/20% pull back to normalisation but this still leaves these looking very good value.
WIX has been the topic of a number of research reports
Citi Group ( Wickes joint broker ) initiated coverage with a “buy” rating and set a 282p price target in a report on 7th. October 2021.
Peel Hunt reiterated a “buy” rating and set a 360p price target in a report the same day.
Deutsche Bank (Wickes joint broker ) initiated at 313p and upped their price target to 320p and gave the stock a “buy” rating in a report on 3rd. December. Reiterated 25th. January.
Liberum Capital upped their price target from 420p to 450p and gave the stock a “buy” rating in a report on 6th. December. Reiterated 24th. January.
Finally, Berenberg Bank upped their price target from 280p to 290p and gave the stock a “buy” rating on 7th. December.
Five investment analysts have rated the stock with a buy rating, Wickes Group presently has a consensus rating of “Buy” and with Liberum as an outlier an average target price of 340p.
Just sticking it up again, whilst bearing in mind the changing economic circumstances, spending patterns and this sort of thing.
https://financialpost.com/investing/analysts-target-prices-rarely-accurate-global-study-finds
If true, statistically at least the lowest may be in with a shout?