It is worth holding shares in mother and baby retailer Mothercare plc (LON:MTC) but a clear profit recovery is still up to a year-and- a-half away.
That's the view of City broker Peel Hunt, which repeated a 'buy' on the shares, but has axed the target price to 150p from 275p previously following interim results today.
Mothercare shares sank almost 6% in London to 105p as it swung to an £800,000 loss for the six months to October 8, compared to a £5.8mln profit for the same period last year.
The firm is in the midst of a turnaround plan, which has seen close shops and move many out of the High Street. It blamed the weather and warehouse changes for Thursday's figures.
Analyst John Stevenson said: "Mothercare’s interim results were ahead of our expectations overall, although the UK loss has increased as a result of disruptions from system changes."
He said the second half had started well and the broker expects the UK to make a profit for the first period since 2011.
But this won't be enough, he said, to offset the first half loss and the broker has cut its above-consensus pre-tax profit by £3.5mln to £20.8mln as a consequence.
Stevenson added: "We see little short term progress until the recovery becomes more manifest in numbers.
"However, there remains a significant opportunity from the potential to drive online capability through the extensive international franchise network; this remains the central case to holding the shares, but still remains 12-18 months from reality."