DC..L Share News (DC.)

(ShareCast News) - HSBC initiated coverage of Dixons Carphone at 'buy' with a 460p price target, saying it is well-place and well-run, with growth underpinned.The bank said Dixons' core prospects are supported by a robust strategic position, solid consumer backdrop and a business well-suited to prevailing industry trends.Dixons Carphone has recalibrated its business model amid competition from low-cost pure-play online operators and changing industry trends.It now prices off Amazon but uses service to differentiate, aiming to sell higher-value product and higher-margin accessories to compensate for a higher cost model."The 2014 combination of Dixons with Carphone Warehouse has created a business well suited to industry change. Growth in connected devices could change the way certain categories are purchased and how consumers and retailers interact."Dixons Carphone is now able to serve consumers across a broader range of products and connectivity services."HSBC said that while the near-term free cash flow yield of around 4% does not imply obvious value, underlying cash generation is strong and should become more apparent.At 0950 BST, Dixons shares were up 0.2% to 419.50p.