22nd Jul 2015 10:11
LONDON (Alliance News) - Numis raises its price target and upgrades its recommendation on DFS Furniture to Add from Hold, saying that the furniture retailer's trading update on Wednesday was positive and removes uncertainty.
DFS Wednesday said that gross sales in its financial year to July 18 were up by 7% year-on-year and said it expects its full-year results to hit record levels. Gross sales rose 4% in the second half of the year which Numis says demonstrates "solid H2 trading against a mixed backdrop and more demanding comparatives".
The broker leaves its forecasts for the full year unchanged, estimating a pretax profit of GBP57.4 million and revenue of GBP704.0 million.
"Given the concerns over the market backdrop due to the ScS profit warning, consumer uncertainty around the general election and variable weather, we view the DFS performance as solid, albeit there are two important trading weeks remaining," Numis says in a note.
The broker adds that DFS shares have performed in line with the sector since its IPO earlier this year, and raises its price target on the stock to 315 pence from 290p.
Shares in DFS are trading up 5.3% at 280.00p Wednesday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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