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Broker snap: DSG to withstand Best Buy invasion

Wed, 26th Aug 2009 12:55

Japanese broker Nomura Securities has been looking at the UK electrical retail sector ahead of the entrance, in partnership with Carphone Warehouse, of US player, Best Buy, and tips DSG International as the best stock to be holding.'The middle market is increasingly competitive, causing a divergence in the major electrical players. DSGi, KESA, Best Buy and John Lewis are all seeking a service-led premium offer. Commoditisation of technological product has driven a price-led, low service model at Tesco and Argos [owned by Home Retail]. This divergence is likely to be accentuated in our view,' Nomura said.Nomura notes that 50% to 60% of DSG's Currys and PC World stores will be refitted by Christmas 2010 as it seeks to reposition the business as a service-led electrical specialist. This ongoing transformation has not been reflected in the company's share price in Nomura's view, and the broker has reiterated its 'buy' recommendation and 35p price target. 'KESA may need a more differentiated approach: Despite being early to the service-led model, the UK offering is not sufficiently differentiated, making KESA more vulnerable if Best Buy fulfils its potential, in our view. New management may need a medium-term strategy to defend its current market share. We maintain our Neutral rating but caution on the longer-term outlook,' Nomura's Christopher Walker said.Carphone Warehouse, meanwhile, offers 'investors a free option on a successful retail launch' by Best Buy, in Nomura's view. The broker rates the stock a 'buy' and has a price target of 230p.
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7 Nov 2011 12:20

London midday: Stocks off the bottom

UK prices are off the bottom, but investors are keeping a wary eye on developments in Italy, where reports suggest that Il Cavalieri, Silvio Berlusconi, could resign the post of Prime Minister within a matter of hours. CHOPPY WATERS AHEAD FOR WEIR Scottish engineering firm Weir, the company which

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7 Nov 2011 09:37

Digital Look broker talk -UPDATE

RBS: "At c0.45x TBV, the shares already discount a lot of negative news. The group prospects are uncertain and vulnerable to downturns in the economy and financial markets. Our recommendations of Barclays and the two Far Eastern banks are more analysable. However, RBS does now look oversold to us, e

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7 Nov 2011 09:20

London open: Recession fears spook investors

You will search in vain for positive features among FTSE 100 index constituents, as every stock that belongs to the top-share index is lower, after consultancy BDO LLP's UK output index, which tries to gauge output over the next three months, declined in October to the lowest level in more than two

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7 Nov 2011 08:30

Carphone will return cash after simplifying Best Buy relationship

Carphone Warehouse is to close its 'big-box' Best Buy stores in the UK, sell off its interest in Best Buy Mobile and return a chunk of money to shareholders. "The eleven Best Buy UK 'Big Box' stores have performed exceptionally at the level of customer satisfaction, but they do not have the nationa

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22 Jun 2011 15:40

Thursday preview: It is no longer a PC world at Dixons

Dixons Retail, operator of edge of town electrical goods barns trading under the Currys and PC World brands, was a wanted share on Wednesday ahead of the company's results on Thursday, but that had more to do with bid speculation than any expectation that the company will announce a sparkling set of

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20 Jun 2011 16:34

Sector movers: Charter pressures engineers lower

Engineering business Charter International saw shares plummet on Monday, dragging the industrial engineering sector lower. Shares were over a quarter lower after the group warned that figures for 2011 are expected to be below forecasts given in its last update in April as a mixed trading picture em

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14 Jun 2011 14:48

'Big Box' stores weigh down Carphone Warehouse

Mobile phones seller Carphone Warehouse is waking up to the idea that entering a market in which established operators such as Dixons and Comet are already struggling may not have been a smart idea, with the group's Best Buy UK group suffering larger losses than anticipated. In its preliminary resu

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13 Jun 2011 17:37

Tuesday preview: Tesco, Glencore, Carphone Warehouse

Warm weather and a string of bank holidays recently has been good news for many consumer-facing companies lately and the broker Panmure Gordon expects supermarket giant Tesco to report a return to like-for-like (LFL) sales growth in the UK in the first quarter. "Food sales will have been helped by

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10 Jun 2011 12:51

Week ahead: Tesco and Sainsbury's to post sales growth

Warm weather and a string of bank holidays recently has been good news for many consumer-facing companies lately and the broker Panmure Gordon expects supermarket giant Tesco to report a return to like-for-like sales growth in the UK in the first quarter. "Food sales will have been helped by the de

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5 May 2011 17:25

Carphone Warehouse raises earnings guidance

Mobile phones seller Carphone Warehouse has raised its earnings guidance for fiscal 2010/11 after having a quick tot up of the fourth quarter numbers. The company now expects full year earnings per share will be in the range of 14.5p to 15p, up from previous guidance of 13.5p to 14.0p. Prior to the

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4 May 2011 18:36

Thursday preview: BoE rate decision, Lloyds, Morrisons ...

It is a big day for central banks on Thursday with the Bank of England and the European Central Bank both set to announce their interest rate decisions, though neither is expected to alter course ... yet. For the Bank of England's Monetary Policy Committee (MPC), the pressure to lift interest rates

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19 Jan 2011 06:40

Wednesday tips round-up: Burberry, Pearson, Chemring...

The extraordinary rise of Burberry, since the brand was reinvented and rescued from chavdom, appears to be accelerating. Like-for-like sales in the first half of the financial year were 9% ahead; in the third quarter, including Christmas, they were up 14%. The shares, below six quid at the start of

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18 Jan 2011 16:42

London close: Shares buoyant as updates impress

The top share index closed near its highs, helped in part by well-received company updates. Burberry was in fashion after bumper demand for outdoor coats and other luxury accessories meant a storming third quarter for the luxury goods group, with revenue up by 30% and profits now set to hit the top

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18 Jan 2011 14:35

London afternoon: Gains get trimmed

Share prices came off the boil over the lunch time session though Footsie remains firmly in the red, as things continue to look rosier in the eurozone. Burberry is in fashion after bumper demand for outdoor coats and other luxury accessories meant a storming third quarter for the luxury goods group

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18 Jan 2011 11:31

Best Buy boost for Carphone Warehouse

Mobile phone retailer Carphone Warehouse has lifted its full-year guidance following a strong performance from its partnership with the US electronics group Best Buy. It raised its guidance for Best Buy Europe's full-year profit share from Best Buy Mobile US to £90m to £100m from £85m to £95m previ

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