Brokers note - French Connection
Altium Securities has re-iterated its Buy recommendation on French Connection following its trading update.
The broker says retail sales in the UK and Europe are slightly better than expected with like-for-like growth of 0.3% but wholesale is down by 11% on last year. Altium is making no changes to its pre-tax profits forecasts for 2010 and expects a loss of £14 million for the current year.
Altium says the shares are well backed by assets and that French Connection has sufficient cash to ride out the downturn as well as having strong brands. This combination justifies its ‘Buy’ recommendation and it continues with its price target of 70p, which compares with an underlying share price of 39p following the 2.5% decline in early trading today (November 25).
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