H&T Group PLC (AIM:HAT) has issued “a positive trading update… which demonstrates continued strong structural demand for its pawnbroking services”, said analysts at broker Shore Capital Markets.
In its analysis, Shore noted the steady performance across H&T's non-pawnbroking operations, which are meeting expectations.
Retail margins are improving and the strong gold price positively impacts purchase and scrap revenues, “analysts said that their overall contribution to the group is not large enough to give us material cause for concern should the gold price retrench”.
Shore Cap left its earnings forecasts unchanged while nudging its 12-month share price target up from 515p to 530p.
“This is equivalent to a 12-month forward PER of c.9x, in line with the long-term average, and implies 26% upside,” said the broker.