JD Sports Fashion Group PLC (LON:JD.) is in vogue with Cantor Fitzgerald, with the broker hailing the “significant potential” for growth in overseas markets.
The Bury-based sportswear retailer reported a sparkling Christmas performance last week, adding that it expects pre-tax profits for the year to the end of January to come in up to 15% of current market expectations of £200mln.
Cantor analyst Mark Photiades said the results showed that the “core sports fashion business is carrying significant momentum in the UK”.
Given the solid trading at home, Photiades has upgraded his full-year profit before tax forecast for 2017 to £225mln (previously £220mln).
The analyst hasn’t stopped there though. He’s also upgraded his full-year PBT expectations for 2017 and 2018 by 24% and 27% respectively.
Despite the strong performance in the UK, it isn’t where Photiades expects the strongest growth to come from in future years, insisting in his research note that the “real potential remains overseas”.
“JD is now fully recognised by the leading global sportswear brands as a major European partner and player and the opportunity for further international growth in Europe and beyond is significant,” the analyst says.
Photiades has maintained his ‘buy’ recommendation and 380p target price for the stock, which implies an upside of almost 10%.
“The [current] valuation, in our view, still does not reflect the true value of the JD concept, which is trading in a rapidly expanding segment of the retail market,” he explains.
“JD has a strong growth record, is clearly differentiated from competitor Sports Direct, has the support of the leading sports brands and has significant potential to be developed overseas, where it now has momentum.”