Currys interim results: Will Black Friday boost offset Budget concerns?
Electronics retailer Currys is expected to report £137 million profit for the first half, but recent Budget measures could impact its recovery trajectory.
First half performance expectations
Analysts forecast a 16% increase in profits to £137 million for the half-year ending October, to be announced on Thursday and incorporating the company’s reported 5% like-for-like revenue growth in the UK and Ireland during the 17 weeks to August 24.
Store visits have increased as customers seek advice about AI technology from in-store experts. This growth comes despite ongoing cost-of-living pressures affecting consumer spending. Whether a spike in sales during the Black Friday period has helped Currys' bottom line, still needs to be seen.
Budget impact concerns
Deutsche Bank recently downgraded Currys, citing concerns about Budget-related cost inflation. The retailer joined other major chains in criticising Labour's business tax rises, which could cost the retail sector £7.06 billion annually. Industry leaders such as Currys warn these measures could lead to job cuts and impact investment.
Strategic initiatives and outlook
CEO Alex Baldock continues to target growth in high-margin, recurring revenue services. He recently maintained his full-year guidance for profit and free cash flow growth. Management has also hinted at potential dividend resumption, a key focus for investors.
The Nordic region's performance remains crucial for overall group recovery and will be closely monitored by analysts and investors alike.
Black Friday and festive trading
Investors await Black Friday trading figures, particularly sales of AI-powered devices. The festive period, as is the case for retailers in general, remains crucial for annual performance. The signs are encouraging as consumer confidence has shown recent improvement despite economic headwinds.
The company's retail strategy of offering face-to-face technology advice could prove advantageous during peak trading such as around the festive season.
Currys analyst rating
Share trading investors await Currys' interim results on 12 December, with analysts focused on whether strong Black Friday sales can counter potential headwinds from recent Budget tax rises.
According to LSEG Data & Analytics, analysts rate the Currys share as a ‘buy’ with 3 ‘strong buy’, 3 ‘buy’, 2 ‘hold’ and 1 ‘sell’. The long-term mean price target is at 98.78 pence, around 24% above its current price (as of 10/12/2024).
Currys technical analysis
The Currys’ share price is range trading below its 200-week simple moving average (SMA) at 83.02p, having come off its October peak at 90p, a level last traded in May 2022.
While it remains above its late June low at 70.00p, though, the medium-term uptrend which began in February, remains intact.
Currys monthly candlestick chart
For the bulls to be back in control, a rise and daily chart close above the 90.00p-to-90.25p June 2019 low and late May-to-October highs needs to be seen. Only then would a longer-term saucer bottom be validated with the psychological 100p mark representing the next upside target.
Currys weekly candlestick chart
The mid-July-to-early December lows together with the 200-day SMA at 75.65p-to-74.90p offers a support area ahead of the more technically significant 72.45p-to-70.00p support area. While it underpins, immediate upside pressure should persist.
Currys daily candlestick chart
Resistance below the key 90.00p-to-90.25p resistance zone can be spotted at the late July as well as August and current December highs at 83.00p-to-83.65p.
How to trade Currys’ shares
- Research the UK retail sector and Currys' market position
- Consider whether to buy shares or trade derivatives
- Open an account with us
- Monitor both company updates and sector trends
- Implement appropriate risk management strategies
While near-term headwinds exist, Currys' strong balance sheet and focus on high-margin services could support its ongoing recovery efforts.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
