Brokers note - French Connection
Altium Securities has upgraded its recommendation on French Connection from 'Hold' to 'Buy' following the announcement of the planned closure of its Japan stores.
The broker has also upped its pre-tax profits forecast for the full year 2011 by £2.7 million (the amount that the 21 Japan stores were predicted to lose). The stores will be closed over the next six to nine months and the company will look for a licensee in the country to operate the French Connection brand.
This upwards profit adjustment resulted in Altium increasing its target price from 50p to 70p and also its recommendation on the company. This compares with an underlying share price of 47.5p following the 2% increase in early trading today (October 5).
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