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(Sharecast News) - Shore Capital left its 'buy' rating on Wickes unchanged on Monday but said it had trimmed nearterm estimates following the retailer's latest update, while maintaining a broadly cautious stance on the trading backdrop.
The broker said Wickes continued to face a difficult market, with subdued DIY demand and ongoing cost pressures weighing on performance. Even so, Shore Capital highlighted areas of resilience, noting that management remained focused on operational discipline, tight cost control and strengthening the balance sheet.
Wickes has continued to streamline its operations and optimise its store estate, with Shore Capital pointing to ongoing initiatives aimed at improving returns and sharpening the group's focus on core categories. It also said liquidity had improved and leverage was moving lower, supported by disciplined workingcapital management and recent progress on debt reduction.
Shore Capital, which reiterated its 240p target price on the stock, added that Wickes was emerging as a leaner, more focused business, though it cautioned that the nearterm trading environment remained challenging. It stated the group was well positioned to benefit from a recovery in homeimprovement spending when demand normalises, supported by its valueled proposition and strong brand recognition.
Overall, Shore said it continued to view Wickes as a steady operator in a pressured market, with improving financial flexibility but limited catalysts in the short term.
Reporting by Iain Gilbert at Sharecast.com
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