Frasers Group expects continued profit growth

​​​Frasers Group expects continued profit growth

​Retailer Frasers reports interim earnings this week, and hopes to build on the success of its most recent full-year figures.

​Frasers Group, the retail giant, announced a significant surge in profits during its full-year results in July. This positive outcome can be attributed to the continued spending habits of young shoppers, who have shown no signs of slowing down.

​Looking ahead, Frasers Group anticipates a profit before tax ranging from £500 million to £550 million for the current financial year. This projection indicates a strong outlook for the company and suggests that their upward trajectory is set to continue.

​One notable aspect of Frasers Group's success lies in its strategic shift towards aligning itself with major brands such as Adidas and Nike. This change in direction marks a departure from their previous approach and reflects a desire to establish closer relationships with renowned industry players. By forging these partnerships, Frasers Group aims to enhance its market position and tap into the popularity and reputation of these well-established brands.

​Over the past three years, Frasers Group has experienced a remarkable growth in earnings per share (EPS). This upward trend is a testament to the company's ability to adapt to changing consumer preferences and capitalize on emerging opportunities in the retail sector.

​Analyst ratings for Frasers Group

​Refinitiv data shows a consensus analyst rating of between ‘buy’ and ‘hold’ for Frasers Group – 2 strong buy, 3 buy, 2 hold and 1 sell - with the median of estimates suggesting a long-term price target of 900 pence for the share, less than a percentage point below the current share price as of 4 December 2023.

​Technical outlook on the Frasers Group’s share price

​The Frasers Group share price, which has risen by over 25% year-to-date, remains on an upward trajectory with the November 2022 and March 2023 highs at 921.5p to 925.0p in its sights.

​Frasers Group Weekly Candlestick Chart

​A weekly chart close above the 925.0p March peak would open the way for the July 2022 peak at 1002.0p to be next in focus.

​Frasers Group Daily Candlestick Chart

​Following its August-to-October tight sideways trading range between 834.5p to 773.5p, the Frasers Group share price resumed its May-to-December ascent in early-November and has been trading within an upward sloping trend channel ever since.

​Support below the lower uptrend channel line at 871.0p comes in at the previous reaction low – a daily candlestick low which is lower than the one on its preceding and following days – which can be seen at the 24 November low at 850.0p. While it underpins on a daily chart closing basis, the Frasers Group share price medium-term uptrend remains valid.