Brokers note - Topps Tiles
Singer Capital Markets has re-iterated its Buy recommendation on Topps Tiles ahead of its Q3 trading update on August 5.The broker says there is evidence that conditions in the market may be stabilising and that Topps is picking up business from failing independents. Singer expects Q3 trading to be down 10% on a like-for-like basis, which is an improving trend and the broker therefore believes forecasts are too conservative on Topps.
Singer can see scope for forecast upgrades during the course of the rest of the year. Topps is on a PE of 15x and the broker suggests the company has the potential for further outperformance in the near term. It retains its price target of 80p, which compares with an underlying share price of 83p following the 3% decline in early trading today (August 3).
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