Talk about fickle brokers …. Liberum Capital swiftly backtracked today on a post-results share price target hike for Sports Direct PLC (LON:SPD) after a subsequent announcement suspending the group’s share buyback.
In an afternoon note to clients, analysts at Liberum Capital returned the target price for Sports Direct to 310p having upgraded it to 375p first thing this morning.
The analysts said they raised the target “in part due to better indications on corporate governance” following the appointment of a new non-executive director with strong City and investor credentials.
Sports Direct appointed David Brayshaw, a senior investment and commercial banker, as a non-executive director and member of the company's Audit Committee with immediate effect.
But, they added: “We were disappointed to see a subsequent announcement that the company is to suspend its share buyback.”
In a one sentence statement, Sport Direct said “it intends to pause its Share Buyback Programme from today's date until further notice.”
They said: “We believe that sentiment will not be helped by suspending the buyback so revert to our previous TP.”
The analysts also downgraded their full-year pre-tax profit forecast for Sports Direct by 6.7% to £128mln to reflect increased depreciations costs and interest charges.
Liberum still has a buy rating on the stock, with the shares well below even the revised target price at 290.5p, down 7.8% or 24.4p in late afternoon trading.