Brokers note - Carphone Warehouse
Credit Suisse re-iterated its Outperform recommendation on Carphone Warehouse following its Q1 trading update and acquisition of Tiscali.The broker has increased its earnings estimates for 2010 by 7.8% to 1 4.2p and by 16.9% to 18p for 2011 and says it does not feel the current valuation fully reflects the synergies that Carphone could deliver from the Tiscali purchase.
Credit Suisse has also increased its target price by 4.5% to 207p, based on a PE of 11.5x 2011 earnings, which it believes is justified on the group's current prospects and when also considering the potential of the longer term value from the Best Buy roll out. The current share price is 176.5p.
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