Shares in AO World fell on Thursday even as the electricals retailer reported a fifth of profit growth, with broker Jefferies nudging down its estimates to reflect a tougher trading backdrop.
The stock dropped 4% to 89.4p after the Bolton-based group said first-half pre-tax profit was set to climb more than 20%, on revenue up 5.5%.
Jefferies kept its "buy" rating but shaved its target price to 155p from 160p, still well above the current level.
The broker cut its 2027 pre-tax profit forecast by 3% to £53.5 million, trimming its assumption for core consumer revenue growth to 4.5% from 6.5%.
Analyst Andrew Wade suspected AO's retail arm ran below the group's headline growth rate, hit by a hot World Cup summer that stretched delivery drivers and by shoppers favouring cooling gadgets and televisions, categories where AO is under-represented.
Even so, Wade called it a solid result, crediting trading discipline and gains at AO's mobile and musicMagpie arms for the profit performance.
He was enthusiastic about the launch of AO Mobile, the group's own mobile network, which offers 500GB of data for £12 a month, a price he reckons undercuts every major UK rival.
Jefferies also welcomed the completed purchase of camera chain Jessops, seeing scope to fold it in alongside musicMagpie and its second-hand arm.
Wade continues to view AO as a winning proposition with a long-term growth runway.
Half-year results are due on 24 November.
