Currys PLC (LSE:CURY) is faced with a tough market backdrop as it enters 2023, but analysts at Liberum think there are a number of positives which could see the share price of the electrical retailer double.
Commenting following today’s trading update, the broker suggested strategic initiatives should drive ongoing UK improvements, while there are good reasons that the issues in its international business could prove temporary.
“If it were not for the latter, guidance would have been upgraded twice in as many months,” the broker noted.
As these underlying markets turn more favourable this will make for a very positive outlook, in the broker’s opinion.
The current valuation discounts only the current level of cyclically depressed earnings, meaning there is a very attractive risk/reward profile, with significant upside potential as the macro backdrop improves and the group demonstrates progress towards its 3% EBIT margin, analysts wrote.
“Putting the current 64p share price in context, it is now below the trough levels of early-COVID when investors’ fears around the survivability of retailers were at their peak – this is despite Currys having roughly halved its total indebtedness,” the broker noted.
Liberum has a 'buy' rating and 135p price target and shares in Currys have soared around 10% to 66.10p following the trading update.