Breaking News

Holland Takes 2-0 Lead Over Brazil in World Cup Runner-up Match
Tweet TWEET

Halfords Jumps to Two-Year High on Analyst Upgrade: London Mover

Halfords Group Plc (HFD), the U.K.’s biggest seller of bicycles, rose to the highest in two years after JPMorgan predicted the stock will gain as the retailer improves service and wins market share in biking gear and repairs.

Halfords, which also operates car service centers across the U.K. and Ireland, will boost revenue “through a halo effect of better service, wider product range and a stronger multi-channel offering,” Georgina Johanan, an analyst at JPMorgan, said today in a note. She raised her recommendation to overweight from underweight, and predicted the stock will gain about 10 percent in 12 months from yesterday’s closing price.

The stock jumped 4.5 percent to 385.7 pence, the highest closing price since June 2011 in London. Halfords, based in Redditch, England, hasn’t declined since April 19 and leads gains among the 14 companies in the FTSE 350 General Retailers Index over the past month, with an advance of 24 percent.

Halfords in October appointed Matthew Davies, formerly the leader of the Pets At Home chain, to be chief executive officer, and said it would improve service and add more cycling parts online. “High-quality management should drive increasing enthusiasm,” JPMorgan’s Johanan said.

Davies said April 10 that Halfords sees a “huge” opportunity to boost the auto center business, for which it intends to open 20 to 30 new outlets a year. The repair portion of the business benefited from last year’s cold weather, which improved car maintenance sales in the fiscal fourth quarter and hurt cycling revenue, Davies said.

Halfords is scheduled to report full-year earnings on May 23.

Of 21 analysts who report their recommendations to Bloomberg, eight advise buying the shares, while seven have a hold rating and six advocate selling. Johanan’s target price of 405 pence compares with the average from 14 analysts of 363.6 pence.

To contact the reporter on this story: Patricia Laya in Madrid at playa2@bloomberg.net

To contact the editor responsible for this story: David Risser at drisser@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.