Halfords shares fall 4.9 percent

Broker puts it down to ’softer cycling sales and labour cost pressures’

Halfords signage
Photo: Bigstock

Halfords Group has seen a 4.9 percent slump in its share price after a broker downgraded the stock and cut its price target.

RBC Capital Markets says Halfords remains a strong player in markets that have seen several challenges over the last few years.

The target price moves from 230p to 220p, while shares were 4.9 percent lower at 192.17p.

The broker says forecasts for the next two years have been reduced by around 3 percent “given slightly lower margin expectations due to softer cycling sales and labour cost pressures”.

Last month, Halfords forecasted an increase in sales from £1.6bn in its 2022-23 year, while predicting a rise in pre-tax profits, up from £50-60m to £90-100m.

An equity analyst questioned the bullish forecast, but chief executive Graham Stapleton told investors: ”Since 2018, we have doubled the size of our B2B and services business and have become the UK’s biggest motoring services provider, increasing our group sales by around 40 percent.

“From here, we see significant potential.”

Source: Proactive Investors

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