Sports Direct share price: Analysts weigh in on group

AJ Bell reckons that Sports Direct International’s (LON:SPD) has delayed its annual results, raising a further question over its acquisition strategy, Citywire reports. The comments came after the mid-cap group said yesterday that it was delaying the publication of its preliminary results, citing the integration of the House of Fraser business along with increased regulatory scrutiny.

Sports Direct’s share price tumbled yesterday giving up 9.57 percent to close at 238.20p, weighing on the FTSE 250 which ended trading 0.17 percent higher at 19,584.14 points. This morning, the shares have climbed into positive territory, having gained 0.76 percent to 240.00p as of 08:11 BST, as compared with a flat mid-cap index.

AJ Bell weighs in on Sports Direct

Citywire quoted AJ Bell’s analyst Russ Mould as commenting yesterday that Sports Direct investors would be concerned about the integration of the House of Fraser and the fact the sportswear retailer believes its December guidance for the full year could be ‘too optimistic’.

“The hint that underlying ‘ebitda’ will now undershoot forecasts, excluding acquisitions, will stoke concerns that Sports Direct’s strategy to supplement organic growth with an acquisition spree is serving as a distraction to management and overstretching the key teams at a time when the core business offers more than enough challenges to keep them busy,” the analyst elaborated.

Other analysts on mid-cap retailer

City A.M. meanwhile commented  Neil Wilson, chief market analyst at Markets.com, as commenting that “the delay in delivering the annual results does not sit well with investors, who must be nervous about what it means”.

“It seems likely it’s been a tough ride in the core Sports Direct retail division, whilst acquisitions have added nothing but increased costs,” he pointed out.

According to MarketBeat, the mid-cap group currently has a consensus ‘hold’ rating, while the average target on the Sports Direct share price stands at 350p.