Financial Trading Blog
Stock of the day 21/06/2016 – DS Smith PLC
Fresh off a choppy end to 2015 DS Smith immediately took a bit of a battering at the start of the New Year. From an opening price of £3.94 the stock had plunged to a 12 month low of £3.29 by the end of the first week of February, the general early-2016 malaise eroding the company’s value. Yet an end of February rebound helped put the packaging firm back on track to reach £4, a level it then reached in the aftermath of its promising March trading update.
(Source: IT-Finance.com 21/06/2016)
Eventually the stock hit a near 4 month high of £4.17 at the end of March, only for DS Smith to abruptly lose momentum as April got underway. Despite another strong trading statement at the end of the month, with DS Smith ‘in line with expectations’ thanks to strong volume growth following €600 million worth of acquisitions in the financial year, the stock couldn’t stall its decline, dropping back to £3.60 by the middle of June. Since then there has been a sharp rebound thanks to wider market movements, leaving DS Smith at a current trading price of £3.79 (IT-Finance.com, 20/06/2016).
In terms of its full year figures, analysts are expecting DS Smith to post a 7% rise in revenue to £4.08 billion alongside a 10% jump in earnings before interest, tax, depreciation and amortisation to £452 million. And given that the company is predominantly based in Europe investors will be keen to hear more on the company’s recently revealed DS Smith China venture, an equally daunting and exciting prospect set to launch this summer.
DS Smith PLC has a consensus rating of ‘Buy’ with an average target price of £4.11.
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