Liberum lifts Dixons Carphone price target after results

(Sharecast News) - Liberum lifted its price target on Dixons Carphone on Wednesday to 175p from 150p following the company's first-half results, reiterating its 'buy' rating.
The broker said the analyst call was reassuring and consistent with the "strong" results reported.

"Balance sheet strength was an important highlight, with management noting that if decent trading continues the group could eliminate net debt by the year-end," it said.

Given the current momentum, Liberum bumped up its FY21 group EBIT estimate by 13% to £182m, driven by more optimistic full year like-for-like sales assumptions.

"We leave our outer year forecasts largely unchanged, but upside risk could emerge as the transformation benefits and UK&I Mobile recovery plan continue to impact," it said.

Earlier, Dixons said trading was strong in the runup to Christmas despite store closures as the electricals retailer reported surging online sales.

The company swung to a pre-tax profit of £45m for the six months to the end of October from a loss of £86m a year earlier as revenue rose 3% to £4.86bn. Adjusted pre-tax profit surged to £89m from £2m. Dixons declared no interim dividend.

Annual online sales more than doubled to £1.8bn as shoppers switched to the internet during the Covid-19 crisis. Online sales in the UK and Ireland surged by 145%, or almost £800m, offsetting lost sales from store closures.

The owner of Currys and PC World also said trading in the first few weeks of the current year remained strong. In the six weeks to 12 December like-for-like electricals sales rose 16%.

(Sean Farrell contributed to this report)