At the start of this month, shares of the electrical and technology retail group Currys (LON: CURY) were trading just above 83p. However, the significant shake-up in Tokyo and global markets led to a drop to 71.60p last Monday.
Last night, as the markets began to stabilize, Currys’ shares closed at 80p, after briefly reaching 80.55p during the day.
Market participants favour ‘active’ stocks, and Currys is shaping up to be one. However, I believe that savvy, patient investors should view market pullbacks as prime opportunities to add undervalued growth stocks to their portfolios—Currys fits this category perfectly.
Currys is a leading omnichannel retailer of technology products and services, operating online and through 727 stores across six countries. In the UK and Ireland, it operates as Currys, both online and through approximately 300 stores, holding a 23% market share.
In the Nordics, it operates under the Elkjøp brand, with around 420 stores and a 27% market share. The group employs about 25,000 people and supports its operations with a sourcing office in Hong Kong, a state-of-the-art repair facility, and an extensive distribution network for efficient delivery to stores and homes.
In recent years, Currys has undergone a significant transformational recovery in its operations and balance sheet, aided by the disposal of its Greek retail side earlier this year.
On Thursday, September 5th, the group will hold its AGM at the Hilton Hotel in Kensington and issue its latest Trading Update, which market observers expect to be quite bullish. The update is anticipated to cover the period since the finals were announced, including significant sporting events that likely boosted sales of TVs, tablets, and mobiles both in-store and online.
Analyst Views
Last month, Deutsche Bank upgraded its recommendation on Currys’ shares from Hold to Buy, raising its price objective to 95p from 80p. Barclays also increased its price objective to 74p from 67p, maintaining an ‘equal weight’ view. Among nine analysts following the group, the consensus is a Buy rating, with price objectives ranging from 65p to 135p, averaging at 96.50p.
Notably, Panmure Liberum analysts Wayne Brown and Anubhav Malhotra rate the shares as a Buy with a target of 135p. They project revenues of £8,374m for the financial year ending April 2025, with pre-tax profits rising to £130.2m and earnings per share increasing to 8.7p. For the following year, they forecast £8,541m in sales, £155.1m in profits, and 10.3p in earnings per share. Looking ahead to the year ending April 2027, they estimate £8,712m in turnover, £178.2m in profits, and 11.9p in earnings per share.
