Shares in Games Workshop Group PLC (LSE:GAW) fell 3% to 18,300p as the stock gave up some ground following recent results. The move looked like mild profit-taking rather than a shift in sentiment, after a powerful rally that has lifted the shares about 40% over the past year.
Analysts at Peel Hunt remain firmly positive. They described the hobby market as being in good health and pointed to an impressive first-half performance.
Core sales rose 18.4% on a constant currency basis, while profit before tax increased 11% to £140.8 million, ahead of expectations. December sales were also slightly higher than a year earlier.
Cash generation continues to stand out. Games Workshop announced another dividend of 110p, taking the total paid so far this year to 485p. That compares with 420p last year and underlines the strength of cash flow.
Peel has upgraded its full-year profit forecast by 4% to £250 million and lifted its target price to 20,000p from 18,000p. It reiterated its buy rating, arguing the business is well set for another strong year despite tougher comparisons.
At current levels, the shares trade on about 31 times forecast earnings to May 2027, excluding cash. After a strong run, some consolidation was probably inevitable.