For a hot minute, Halfords looked like it was on track for a stellar 2017. Its third quarter update in mid-January caused the stock to jump 9%, spiking to a 6 month peak of £3.80 after revealing a 7% surge in like-for-like retail revenue and announcing plans for a special dividend.
From that high Halfords began to tumble, suffering a sharp 8% decline towards the end of February as analysts argued that better quality bikes would lead to weaker sales in the long-term as the replacement cycle lengthens. This caused the retailer to sporadically dip below £3.40 in March, only for it to get a spring in its step at the start of April, climbing all the way back to £3.80.
However, it was here that Halfords’ troubles really began. News that CEO Jill McDonald was heading to M&S (LON:MKS) to take over its flagging clothing division softened up the stock in early May, a process that continued when Halfords posted a 7.5% fall in full year pre-tax profits later in the month.
The UK election result in June was then enough of an excuse for investors already looking for the exit, with the subsequent retail sector-wide struggles, and failure to update investors on the search for a new CEO, further exacerbating Halfords decline. Since the start of June the company has fallen more than 15%, and now lurks at a current trading price, and 14-ish month nadir, of £3.12.
So has Halfords got anything in the back that can help rejuvenate its stock this Tuesday? Well, first quarter like-for-like sales are expected to rise 3%, so that’s something. Yet without any update on its CEO-search investors may well come away disappointed.
Halfords Group (LON:HFD) PLC has a consensus rating of ‘Hold’ alongside an average target price of £3.54.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.""
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved. In relation to fixed odds, Spreadex Ltd is licensed and regulated by the Gambling Commission under licence number.