Home Retail Group Plc : Breakout of the GBp 136.6 resistance
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02/21/2013 | 04:42am
Opinion : Bullish above 136.6 GBp
Target price : 141 GBp Potential: 6.25%
Stop loss: 134.4 GBp
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LONDON STOCK EXCHANGE
Retail – Department Stores |
After a 3 years decrease, Home Retail Group is initiating a rebound since June 2012 after the publication of the first quarter of 2012 is not as bad as forecasts.
The fundamental qualities of the group are attractive as evidenced by the upward revisions of earnings per share and revenue estimations. Moreover, the "enterprise value/sales" ratio is very low for 2013 (0.14x).
The stock initiated a rebound since June 2012. Indeed, it bounced twice on the GBp 69.8 support level, and is now in a bullish trend. The security is supported by increasing moving average in daily data, and has just exceeded the 100-week moving average. This configuration should help the stock to breakout the GBp 136.6 resistance, and to comeback to its GBp 141 long term resistance then GBp 165.
Taking into account all these elements, investors could buy the stock at the current price. The first target price is set at the GBp 141. A stop loss will be set below the GBp 136.6 resistance, threshold that would invalidate the strategy.
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Camille Chretien
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Valuation |
2014e |
2015e |
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PER (Price / EPS)
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24,0x |
16,7x |
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Capitalization / Revenue
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0,23x |
0,23x |
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EV / Revenue
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0,17x |
0,18x |
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EV / EBITDA
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4,24x |
4,18x |
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Yield (DPS / Price)
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2,23% |
2,48% |
| Profitability |
2014e |
2015e |
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Operating Margin (EBIT / Sales)
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1,74% |
1,86% |
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operating laverage (Delta EBIT / Delta Sales)
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3,65x |
8,87x |
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Net Margin (Net Profit / Revenue)
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1,18% |
1,35% |
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ROA (Net Profit / Asset)
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1,35% |
1,55% |
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ROE (Net Profit / Equities)
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2,43% |
2,70% |
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Rate of Dividend
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53,3% |
41,4% |
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