Will digital sales help JD Sports shares or will Covid-19 stop the surge?
The JD Sports share price is riding a six-month high despite British retail suffering due to another lockdown. As current trends suggest profits could be up 10% on 2020, analysts tip JD Sports shares as one to watch.
- Can JD Sports shares continue their record-setting trend?
- 2021 revenue expected to be 10% ahead of 2020
- New acquisitions could keep JD Sports share price strong during Covid-19 shutdowns
- Want to trade JD Sports shares? Open an account today
JD Sports (JD.L) recently issued strong revenue guidance, despite warning that continued high street closures will impact the business as a whole. In the financial update, the sports retail company said that year-on-year earnings have increased by 5% since mid-December. The company also issued new guidance on its projected profits. Thanks to an uptick in online sales, JD expects annual revenue to hit £400 million.
Analysts bullish on JD Sports share price
The bullish forecast kept the JD Sports share price high at the start of this week. Monday trading saw JD Sports shares peak at £9.23 before levelling off at £8.89. That uptick made JD Sports the top performer on the FTSE 100 for 11 January. Analysts remain hot on this stock. Peel Hunt and Shore Capital recently reiterated their buy ratings, while Liberum Capital maintained its hold position.
Perhaps the most noteworthy change in recent days came from Berenberg Bank. The German investment bank maintained its buy rating and increased its JD Sports share price target. Analysts upped their prediction on what JD Sports shares could be worth from £9.00 to £9.75. That would be a 9% increase on the £8.92 JD shares opened on 12 January.
JD’s current surge is being fuelled by strong online sales and the recent acquisition of Shoe Palace. The £241 million takeover has increased the company’s footprint in the US. What’s more, it comes just as JD’s new flagship store in New York’s Times Square is finding its feet. This global expansion has allowed JD to remain buoyant despite Covid-19 restrictions in the UK. Indeed, analysts are wary that ongoing disruption could weigh heavily on the company’s bottom line.
Will Covid-19 bite or will JD Sports shares ride the storm?
JD’s own analysts warned that retail units in the UK and Ireland may be closed until April. Given the current economic crisis caused by Covid-19 shutdowns, many may never reopen. That could take its toll. However, with JD announcing its acquisition of Wellgosh on 11 January, the company is bolstering its network of high street and online stores.
That could be critical in what’s an uncertain time for British retailers. As major brands go under, JD Sports is capitalising on its digital network and the wider needs of other companies looking for bailouts. That’s pushed the JD share price to new heights in recent weeks. The question now is how long the upswing can continue and whether or not online sales will offset its Covid-affected high street stores.
Do you think the JD Sports share price will continue its record-breaking run?
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Footnotes
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2 Deal three times or more in the previous month to qualify for our best rate.
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