STOCKS TO WATCH: Bullish comments from Peel Hunt on Mike Ashley’s Frasers, as plans for son-in-law to take helm are revealed
There are bullish comments from investment bank Peel Hunt on Mike Ashley’s Frasers, which last week confirmed rumours it had begun plans to replace the big man at the helm with his son-in-law.
Analyst Jonathan Pritchard described a presentation on Thursday as ‘the most enlightening we have ever seen’ from the group, with clear plans for growth.
That includes a strategy for ‘exponential’ growth in sales of luxury goods, spearheaded by Flannels, while focusing on the sports participation at Sports Direct and potentially diverging from fierce rivalry with JD.
End of an era: Mike Ashley’s son-in-law will replace him at the helm of Frasers
But he warned investors will need to hunker down while rising star Mike Murray gets his teeth more firmly into the group strategy and that changes would not come cheaply.
Could ‘Little’ Mike come with a knack for elevating communication as well as the group’s sometimes confusing strategy?
Peel Hunt raised its price target to £5.50 from £4 – still below today’s £5.87.
Bumper year for Hargreaves Lansdown
It’s likely to be a bumper year for investment supermarket Hargreaves Lansdown, judging by the swathes of ‘armchair investors’ who have piled into the stock market during the pandemic.
The FTSE100 member will publish its full-year results tomorrow, and analysts at Barclays are expecting a ‘record year of activity’.
They reckon annual profits before tax will have risen by more than a tenth to £378.6million.
The results will be a boost to the fund supermarket, which came under fire last year over its loyalty to disgraced investor Neil Woodford.
The site continued to promote Woodford’s collapsing Equity Income fund even after it started to run into trouble.
Compass moving in right direction
Catering giant Compass appears to have something cooking, says Shore Capital, following an impressive update last month.
Momentum in new contract wins ‘stands out’ with a ‘blue sky’ scenario that revenues could hit £35billion by the middle of the decade.
Shore suggests the firm is recovering faster than the market is giving it credit for and that upgrades could be down the line.
Buy with a fair value of £16, it says.
Credit Suisse revises share target at Robert Walters
Credit Suisse says ‘strong activity’ in permanent recruitment at consultancy Robert Walters has prompted it to revise its share price target from £7.75 to £8.15.
Robert Walters reported record first-half profits last month.
The employment market is encouraging on several fronts, from rising starting salaries, shortages in some industries and demand from companies reopening after extended periods of lockdown.
Credit Suisse is more muted on the medium-term prospects, but with the market hotting up in the short term, its price forecast would be a premium on Robert Walters’ £6.74 close on Friday.