Liberum Capital has downgraded its rating for Safestyle UK PLC (LON:SFE) to ‘hold’ from ‘buy’ and cut its target price to 130p from 200p after the retailer and manufacturer of PVCu replacement windows and doors said there has been a continuing deterioration in trading conditions in its markets.
In a note to clients, analysts at Liberum said they have taken a cautious view of the impact of weak market conditions and of an aggressive new market entrant and cut their 2018 revenue estimates by 10% following today's trading update from the FTSE small cap firm
READ: Safestyle UK shares shatter on second profit warning in as many months
The analysts said they noted that the new aggressive market entrant has had a significant impact on Safestyle.
They added; ”This has caused management to warn that it now expects revenues and profit for its 2018 financial year to be materially below 2017 levels and market expectations.”
The analysts concluded:” We cut our target price to 130p and rating to ‘hold’ as we expect the stock market to take a prudent view of valuation until the impact of the new entrant is digested and cost savings delivered successfully.
In late morning trading, Safestyle shares were down 21% at 120p.