Currys PLC's (LSE:CURY) profit warning today has prompted analysts at Liberum to reduce their fiscal year 2023 pre-tax profit forecast for the company by 16.9% to £100.7mln, at the lower end of the new guidance provided by the electrical retailer of £100mln to £125mln.
The City broker's analysts also lowered their fiscal year 2024 and 2025 profit expectations by 12.1% and 8.9% to £136.2mln and £159.5mln, respectively.
Currys' first-half adjusted EBIT of £29mln was actually ahead of the Liberum £9mln forecast reflecting a more resilient UK showing but this was offset by a weaker performance in the Nordics where “weaker demand and aggressive pricing by competitors creates near-term uncertainty”, the analysts said.
“More positively, further UK gross margin gains (+160bps) signals clear strategic progress, International’s strong track record gives us confidence in a rebound when the market normalises, and the group has over £500m of liquidity headroom” they added.
The Liberum analysts forecast that Currys shares could come under further short-term pressure, but suggested that there should be very material upside as the market recovers, profitability improves and the group demonstrates progress towards it 3% EBIT margin.
They kept a 'buy' rating on the stock but cut their price target to 135p from 150p.
Shares in Currys were trading down 6.7% at 61p in early trading on Thursday.