www.supergroup.co.uk

Investec says Supergroup's valuation "undemanding" given growth potential

14 January 2015 10:16

A return to strong positive like-for-like (LFL) sales growth in the third quarter at Supergroup "should be welcomed" by the market, according to Investec which lifted its target price for the fashion retailer on Wednesday.
The broker, which lifted its earnings estimates for the firm, upped its target for the shares from 1,000p to 1,030p and reiterated its 'buy' recommendation.

Following on from a 4.2% drop in LFL sales in the second quarter, Supergroup said LFLs improved by an impressive 12.5% in the 11 weeks to 10 January.

"Whist up against a soft comparable, the strength of growth is likely to surprise, as well as the fact that there has been a material acceleration in estimated two-year LFL [run rate] to at least double digit, from Q2's +3.3%," said Investec analyst Kate Calvert.

She said that the retailer's performance was "consistent" across mens and womenswear as well as the UK and Europe.

Investec has raised its profit before tax forecast for the fiscal year ending 30 April by 3.4% to £62.5m.

This remains in line with the company's guidance of £60m-65m, with Calvert saying that strong sales will not directly benefit profits as they will be partially offset by foreign exchange movements, bad debt with a big wholesale customer, costs and tactical issues.

"Valuation looks undemanding for a business capable of delivering consistent double-digit growth given the longer term opportunities, both within the UK and Internationally," the analyst said.

"More consistent delivery should drive a re-rating over time."

The stock was up nearly 10% at 891.5p by 10:57.

Related Companies: SGP

SGP Super Group.... another on the verge of a breakout. 15% increase in sales over xmas. Keep on the red hot list.

SGP BREAKING OUT.

SGP BREAKOUT............


19 Jan 2015 SuperGroup PLC SGP Berenberg Buy 922.75 903.50 1,160.00 1,160.00 Reiterates

SP TARGET 1160p

Loads errrrrrr money doodlemug.

Date Broker Rec. Price Old target price New target price Notes
19 Jan 15 Berenberg Buy 971.25 1,160.00 1,160.00 Reiterates
14 Jan 15 Berenberg Buy 971.25 1,160.00 1,160.00 Reiterates
14 Jan 15 Canaccord Genuity Buy 971.25 1,000.00 1,000.00 Retains
14 Jan 15 Investec Buy 971.25 1,000.00 1,030.00 Reiterates
14 Jan 15 Cantor Fitzgerald Buy 971.25 1,000.00 1,000.00 Reiterates
09 Jan 15 Investec Buy 971.25 1,000.00 1,000.00 Reiterates
19 Dec 14 Investec Buy 971.25 1,000.00 1,000.00 Reiterates
18 Dec 14 Canaccord Genuity Buy 971.25 1,000.00 1,000.00 Retains

Cracking results

Supergroup £20 soon!!!

Banged on about this one before. Getting back up.

Sold today. May be some more upside to come!!!