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(Sharecast News) - Analysts at Canaccord Genuity upgraded motoring and cycling products retailer Halfords from 'hold' to 'buy' on Friday following the group's "better-than-expected" second half trading performance.
Canaccord Genuity, which also hiked its target price on the stock fom 156p to 170p, said Halfords H2 trading update had prompted it to upgrade its FY26 adjusted pre-tax profits forecast by 6% to 39.5m.
While the Canadian bank noted that full financial and operational detail would not be provided until June, it feels that Halfords' new leadership team's strategy was already gaining traction with "positive results starting to materialise".
Looking ahead, Canaccord noted that despite ongoing geopolitical uncertainty, Halfords' trading across March and April had been in line with expectations, with the majority of FY27 energy costs and FX requirements hedged. As a result, management indicated that it was comfortable with current FY27 consensus expectations for adjusted pre-tax profits of 42m to 48.6m.
"With the strategy starting to gain traction, we believe now is the right time to turn more positive on the shares and move to 'buy' from 'hold. Our target price increases to 170p from 156p, based on a CY26E target PER multiple of c.11x (in line with the long run average), providing upside of c.17% or c.23% on a total return basis," said Canaccord Genuity.
Reporting by Iain Gilbert at Sharecast.com
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