LONDON, March 3 (New Ratings) “” Analysts at Dresdner Kleinwort Wasserstein downgrade Dixons (DXNS.L) from “hold” to “reduce.” The target price has been reduced from 155p to 148p
Shares of Dixons, a British electronics and electrical equipments retail company, are currently trading at 156p.
According to Dresdner Kleinwort Wasserstein’s research note published this morning, Dixons’ stock has appreciated considerably from its low trading levels about a year ago. The analysts mention that the company’s electrical equipment retail end markets are likely to remain sluggish in the near term. Dresdner Kleinwort Wasserstein considers the recent rally in Dixons’ share price an attractive profit taking opportunity for investors.
Dixons’ product cycle is unlikely to lead to any significant sales growth upside in the near term, the analysts say. Dresdner Kleinwort Wasserstein expresses its concern regarding the underlying weakness in the company’s TV markets and limited growth potential for the white goods segment this year.
The analysts consider Dixons’ existing market share in the fast-growing online retail segment small as compared to the broader UK market shares. Dresdner Kleinwort Wasserstein expects adverse warranty accounting shifts, if any, to considerably offset the company’s near-term earnings growth potential.
Dresdner Kleinwort Wasserstein downgrades Dixons from “hold” to “reduce.”
From New Ratings