Liberum lowers price target on ToppsTiles following 'cautious outlook'
Broker Liberum trimmed its forecasts for Topps Tiles on Wednesday, saying the retailer's cautious outlook had highlighted some weakening in recent weeks.
FTSE All-Share
4,290.02
16:54 18/04/24
FTSE Small Cap
6,365.04
17:14 18/04/24
General Retailers
3,805.00
17:14 18/04/24
Topps Tiles
41.00p
16:45 18/04/24
Liberum said Topps' third-quarter trading statement had reflected the tough market conditions seen across the retail sector as a whole.
While like-for-like sales were only down 2-3%, combining this with slightly more prudent store opening and gross margin assumptions, analysts opted to lower their pre-tax forecasts by roughly 5% across Topps' next two trading years.
However, the analysts noted that while there was "clearly" uncertainty surrounding market conditions for the remainder of the year, good cost control should provide Topps with some support moving forward.
"We also believe Topps' leading, specialist market position leaves it better placed than its rivals to weather the softer trading conditions," they said in a note to clients on Wednesday.
"We do not see any change in the positive longer-term fundamentals and, with the group trading close to its a 5-year historic low PER, we see good value for those willing to look past the shorter-term."
A 'buy' rating was reiterated on the shares, but the target price was cut to 90p from 95p.