STOCKS TO WATCH: Frasers sheds light on analysts
STOCKS A LOOK AHEAD: Peel Hunt’s bullish comments on Mike Ashley’s Frasers, as plans for son-in-law to take the helm revealed
There are upbeat comments from investment bank Peel Hunt on Mike Ashley’s Frasers, who confirmed rumors last week that she had started considering replacing the big man at the helm with his son-in-law.
Analyst Jonathan Pritchard described a presentation Thursday as “the most informative we’ve ever seen” from the group, with clear plans for growth.
This includes a strategy of “exponentially” growing sales of luxury goods, led by Flannels, while focusing on sports participation in Sports Direct and potentially diverging from the fierce rivalry with JD.
End of an era: Mike Ashley’s son-in-law will replace him at the head of Frasers
But he warned investors will have to fall back as rising star Mike Murray fits more firmly into the group’s strategy and the changes won’t come cheap.
Could the “little” Mike have the gift of improving communication as well as the sometimes confusing strategy of the group?
Peel Hunt raised its price target to £ 5.50 from £ 4 – still below today’s £ 5.87.
Record year for Hargreaves Lansdown
It will likely be a banner year for investment supermarket Hargreaves Lansdown, judging by the swathes of “armchair investors” that have crammed into the stock market during the pandemic.
The FTSE100 member will release its annual results tomorrow, and Barclays analysts expect a “record year of activity”.
They estimate that annual pre-tax profits will have increased by more than a tenth to £ 378.6million.
The results will give the fund’s supermarket a boost, which was criticized last year for its loyalty to disgraced investor Neil Woodford.
The site continued to promote Woodford’s Equity Income fund even after it started to run into problems.
Compass moving in the right direction
Restaurant giant Compass seems to have something to prepare, says Shore Capital, following an impressive update last month.
The momentum in the new contracts won “stands out” with a “blue sky” scenario whereby revenues could reach £ 35bn by the middle of the decade.
Shore suggests the company is recovering faster than the market believes, and upgrades could take place later.
Buy with a fair value of £ 16, he says.
Credit Suisse revises Robert Walters’ share target
Credit Suisse says “strong activity” in permanent hiring at consulting firm Robert Walters has prompted it to revise its share price target from £ 7.75 to £ 8.15.
Robert Walters announced record first half profits last month.
The job market is encouraging on several fronts, from rising starting wages, shortages in some industries and demand from businesses reopening after long periods of lockdown.
Credit Suisse is more low-key on the medium-term outlook, but with the market warming in the near term, its price forecast would be a premium on Robert Walters’ £ 6.74 close on Friday.