LONDON (ShareCast) - Singer Equity Research has downgraded its rating of floor coverings retailer Carpetright (LSE: CPR.L - news) reckoning
the share price now represents fair value.
"Our change of stance [from a "buy" rating] reflects the re-rating that has been achieved. The shares are up c75% since going onto the buy list and firm evidence of stabilising UK sales is now required to advance any further," Singer says. The broker has a price target of 565p for the stock.
"Our forecasts assume an EBIT [earnings before interest and tax] margin in the UK of just 4.5% in the year just ended, but with scope for recovery back towards 14.5% once it emerges from the down-cycle. Historical recovery has been rapid and we see no exception to that rule this time round," Singer observes.
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