Interactive Brokers shares jump as it secures spot in S&P 500
Berenberg raised the price target on Currys Plc (CURY:LN) to £1.25 from the previous £0.92, while maintaining a Buy rating on the stock. The adjustment follows Currys' significant reduction in total indebtedness and a strong financial position at the end of the fiscal year in April 2024.
Currys, a leading electronics retailer, has successfully implemented a turnaround plan, which has led to a reduction of more than £700 million in total indebtedness from fiscal years 2019 to 2024. As a result, the company reported a year-end net cash balance of £96 million in April 2024. Berenberg highlights that Currys' financial discipline, coupled with a clear strategy and a right-sized cost base, will support the company's normalized capital expenditure levels, fostering further growth.
The firm also projects that Currys will eliminate its pension deficit by the fiscal year 2027, which will then halt related contributions. This change is expected to result in a significant increase in free cash flow (FCF) to equity, estimated to reach approximately £100 million in fiscal year 2027 and exceed £150 million per annum thereafter.
The improved financial outlook has given Currys' management the confidence to announce the resumption of dividend payments in the current financial year. While the dividend declaration is pending, Berenberg anticipates a potential yield of around 4%, which could attract income-focused investors.
Berenberg's revised price target reflects confidence in Currys' ability to maintain a growing net cash balance sheet and deliver on its financial commitments. The endorsement of the company's strategic measures indicates a positive outlook for Currys' financial performance in the coming years.
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