Halfords Group PLC (LSE:HFD) has more road ahead after Panmure Liberum lifted its target price to 260p from 190p, arguing that the motor and cycle retailer’s recent re-rating is backed by improving earnings momentum across the business.
The broker kept its Buy rating on the shares, which closed at 217p on 25 June, and raised FY27 pre-tax profit forecasts to £54mln, slightly ahead of the company’s upgraded guidance range.
“Following the recent results, we make an underlying upgrade of 6%, taking our forecasts a touch ahead of the newly upgraded guidance range,” analysts said.
Panmure Liberum said the upgrade should be supported by remaining Fusion garage conversions, modest like-for-like growth in Cycling and the wider application of Fusion learnings across the Autocentres estate.
The broker also pointed to a cleaner earnings picture, with tyres beginning to stabilise and cost pressure easing.
“With tyres finally showing signs of stabilisation, all areas of the P&L are now moving in the same direction, while moderating opex should provide further support,” analysts added.
Retail like-for-like sales rose 4.1% in FY26, with Cycling up 6.4% and Motoring ahead 2.9%. In Autocentres, excluding Avayler, like-for-like sales grew 5.8%, while EBIT increased 20% to £18.9mln.
Management is shifting Retail toward more disciplined category management, with renewed emphasis on cycling and e-bikes. In Autocentres, the focus is moving from the Fusion rollout to broader garage optimisation, with the final 35 Fusion conversions expected in FY27.
Panmure Liberum said the shares still offer a forecast 12% three-year EPS compound annual growth rate and a 6% dividend yield, supporting the higher valuation.
