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Financial trading blog

Monday, May 23, 2016
Connor Campbell - Market Analyst at Spreadex

Stock of the day 23/05/2016 – Dixons Carphone PLC

Having strived valiantly in the second half of 2015 to hit the heady heights of a record £5 high by the end of the year Dixon Carphone didn’t get much chance to enjoy its time at the top. Almost immediately as 2016 got underway the stock began to fall, plunging all the way to a 3 month low of £4.29 across the first 3 weeks of January.

Things improved somewhat towards the end of the month, the general market-rebound and a strong post-Christmas update lifting the stock to £4.77. Whilst the company announced it was closing 134 stores as the PC World/Currys/Carphone Warehouse merger continues, those holiday figures also revealed a record Black Friday and a 5% rise in like-for-like sales for the group over the 10 weeks to 9th January.

Dixons Carphone PLC Chart May 2016 Spreadex Financial Spread Betting
(Source: 23/05/2016)

Sadly those gains didn’t last very long, with the turbulent first half of February causing the stock to fall all the way back to £4.22. That set Dixons on a path of gradual decline that, even with the acquisition of the UK’s largest multi-channel switching platform Simplifydigital, eventually saw the stock hit a 7 month nadir of £4.05 in the second half of April.

Yet, having just about avoided falling below £4, the stock has seen something of a recovery since that low, with Dixons Carphone at a current trading price of £4.40 (, 23/05/2016). Ominously Dixons had managed to reach that level at the end of April, only to see a sharp decline, so it remains to be seen whether this week’s results can cause the stock to sustain its gains.

In terms of its fourth quarter figures, Dixons Carphone is expected to post a 3% rise in revenue whilst confirming its full year pre-tax profit guidance of £445 million, a near 17% jump year-on-year following 2015’s 21% super-surge.

Dixons Carphone PLC has ‘Buy’ ratings from Deutsche Bank, Liberum Capital, Citigroup and Investec, an ‘Overweight’ rating from Barclays and a ‘Top Pick’ rating from RBC Capital.

Recent Posts:
Weekend Paper Roundup 23/05/2016
Morning Market Comment 23/05/2016
Evening Market Comment 20/05/2016
Afternoon Market Comment 20/05/2016
Stock of the day 20/05/2016 - Marks & Spencer Group PLC


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