Card Factory PLC (LON:CARD) was upgraded to ‘buy’ from ‘hold’ by Liberum as analysts believe shares are currently factoring in “a worst case scenario”.
The 49% drop over the last three months seems “very harsh”, according to the broker, as the greeting cards chain is “is a good quality, vertically integrated, high margin business with strong cash flows”.
READ: Card Factory downgraded by UBS as it awaits new strategy
The FTSE 250-listed company, hit by lower high street footfall and rising cost inflation, is due to deliver a strategic review alongside its finals next month, which the market expects to shed clarity on future growth opportunities.
“We suspect all options are being considered, including a review of the store estate, existing and new partnership opportunities and other capital-light channels, as well as potential mergers and acquisitions,” analysts said, maintaining the 100p target price.
Shares rose 3% to 81.07p on Monday at noon.