Frasers’ current discount is “unjustified” according to Shore Capital, commenting on the retailer’s record performance.
Shares in the FTSE 100 retailer currently trade on a price-to-earnings ratio (PER) of 9.6x.
“In our view, the current discount to peer group multiples is unjustified, considering the company’s strengthening market position and its exposure to the luxury sector, as well as its significant diversification within the consumer space,” said analyst Eleonora Dani.
Performance was largely driven by the success of its core Sports Direct business and the positive influence of recent acquisitions.
“The company’s unwavering commitment to fortifying brand partnerships, the successful launch of Frasers Plus, a credit facility and loyalty program, and the substantial investments in e-commerce have all played pivotal roles in contributing to this strong performance,” said Dani.
Looking ahead, Frasers raised adjusted profit before tax guidance by 3% to between £500mln and £550mln, which is ahead of both consensus and Shore Capital’s forecasts.