Financial Trading Blog
Stock of the day 07/04/2016 – JD Sports Fashion PLC
Can its impressive run continue when the company reveals its full year figures next Thursday?
Spending 2015 continually hitting fresh all-time highs (following mid-2014’s 4-for-1 stock split) JD Sports received yet another boost at the start of December, when it updated the market on its full year outlook. Stating that it now expected pre-tax profit of £135 million, £10 million higher than analysts’ previous estimates, the stock rose to a 2015-peak of£10.81 before closing out the year at £10.40.
(Source: IT-Finance.com 07/04/2016)
The company didn’t wait long to provide investors with even more reason to sprint for the buy button, its mid-January update, coming after a ‘very strong’ Christmas period that saw a 10.6% rise in like-for-like sales, causing the stock to hit a fresh high of £11.65 by the start of February. The cherry on top? After stating its pre-tax profits should be higher than the initial £125 million forecast back in December, JD Sport announced post-Christmas that its profits should exceed even that adjusted £135 million outlook.
Whilst JD Sports has done its damnedest to lift its stock price it isn’t impervious to macro-movements, and by the end of the first week of February it had plunged back to the £10.20s. Yet the resilience of the stock once more came into play, and JD Sport quickly bounced back, the start of March seeing it re-enter all-time high territory.
Add onto that a £21 million deal to buy Aktiesport and Perry Sport form Dutch-firm Unlimited Sports Group, significantly increasing the company’s presence in Europe, alongside the fact that it has overtaken Sports Direct as the UK’s most valuable listed sportswear chain, and JD Sport is in robust health, sitting at a current trading price of £11.45 (IT-Finance.com, 07/04/2016).
Now all the company has to do is make good on its promise of a super-surge in profits next Thursday!
JD Sports Fashion PLC has a consensus rating of ‘Buy’ with an average target price of £9.71.
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