Dixons share price rises as Investec upgrades stock to ‘buy’

Dixons Carphone Plc’s (LON:DC) positive Christmas trading update yesterday has earned the mobile phone and consumer electronics retailer a stock upgrade from Investec.

The brokerage boosted its rating on the company’s shares to ‘buy’ from ‘add’ today, citing market share gains and improvement in Dixons’ core business. Investec believes that these factors should be enough to drive medium term profit growth at the retailer despite continued softness in the Nordics.
“Ongoing self-help and market share gains characterise the near-term story at a time when DC faces a slower electricals market,” broker was quoted as saying in a note. “Significant downsizing of its portfolio will help strengthen the underlying proposition & UK margins in our view,” it added.

Dixons announced yesterday that it would roll out its 3-in-1 store concept, by merging its remaining PC World stores with Currys and inserting a Carphone Warehouse into those outlets. As a result, Dixons will close 134 shops this year.
Investec’s analysts concluded that the company’s valuation reflects the group’s attractive investment case.
In today’s trading, Dixons shares were up 2.6 percent at 468.30p, as of 15:15 GMT. The stock has fallen 6.3 percent since the start of the year and the company’s market capitalisation currently stands at £5.5 billion.
The 13 analysts offering 12 month price targets for Dixons Carphone have a median target of 535.00p, with a high estimate of 575.00p and a low estimate of 315.00p. As of January 25, 2016, the consensus forecast amongst 14 polled investment analysts covering Dixons Carphone had it that the company will outperform the market. The same consensus estimate has been maintained since May 24, 2013, when the sentiment of investment analysts improved from ‘hold’.
As of 15:52 GMT, Wednesday, 27 January, Dixons Carphone PLC share price is 470.30p.