Dixons Carphone

Dixons Carphone

The all-share merger last August of Dixons (owner of Currys and PC World) and Carphone Warehouse was well received by the market. The shares have risen steadily from 320p to around 450p today.

City analysts remain keen on the stock after the company released forecast-beating maiden interim numbers before Christmas. The Board also said that integration is progressing well, and that £80m+ of synergies are now expected by 2016-17, one year ahead of plan.

Analysts at Barclays and Investec were among a number of City company-watchers to reiterate positive ratings. Barclays has Dixons Carphone trading broadly in line with the UK General Retail sector on a 2015 calendar-year price-to-earnings (P/E) ratio of 15, but said “we see significant upside risk to our earnings forecasts”. Meanwhile, Investec noted the company’s current modest dividend yield of around 2%, but highlighted “free cash flow increases in FY16, potentially offering scope for further shareholder returns”

Company website: www.directmarkettouch.com

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