Financial Trading Blog
Stock of the day 12/04/2016 – Debenhams PLC
Trading below the £1 mark since the end of 2013 it’s been a rough few years for Debenhams, and 2015 was no different. After touching highs of nearly 97p the stock lost its way as the year began to wrap up, eventually entering 2016 at 73p, 3p less than where it was 12 months earlier.
The stock continued to slump in early January, hitting a 14 month low of 66p only a week and a half into the year. Yet things picked up on the 12th January, Debenhams jumping nearly 15.5% as the company revealed a 3.5% increase in like-for-like sales over the Christmas period (and a 1.9% for the quarter ending January 9th). What is interesting about Debenhams’ holiday success is that it was against the wider trends in the clothing sector, the company’s decision to stock fewer coats and winter jumpers seeing it escape the same ‘warmer weather slowdown’ suffered by the likes of Next and M&S.
(Source: IT-Finance.com 12/04/2016)
Since then Debenhams has largely risen and fallen in line with the wider-market movements, the stock hitting a year (and 3 month) high of 81.6p before slipping to a current trading price of 76p (IT-Finance.com, 12/04/2016).
In terms of the company’s half year report on Thursday, analysts are expecting Debenhams to post a 2.3% increase in pre-tax profits to £91 million alongside a 2% rise in sales to £1.64 billion. However, any excitement over these figures may be tempered slightly if the company fails to update investors on its search for a CEO to place the departing Michael Sharp.
Debenhams PLC has a consensus rating of ‘Hold’ with an average target price of 80.9p.
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