Investec upgrades Currys to ‘buy’, shares surge

Currys surged on Wednesday after Investec upgraded the shares to ‘buy’ from ‘hold’, saying the electricals retailer’s peak trading statement assuaged some of the concerns it had at the interims with regards market share declines, showing a "material" improvement in UK & Ireland margins.

The broker said the strong gross margin performance and further second-half gross cost savings give it confidence to upgrade its FY23 pre-tax profit forecast by 15%.

"However, the Nordics business threatens to remain a drag on profits in FY24E, hence our outer year forecasts remain broadly unchanged," it said.

"Nevertheless, we believe the market valuation not only reflects a worse-case scenario, but ignores the ID Mobile business optionality." Investec said the ID Mobile business could ultimately be valued at as much as £374m if it can grow its active subscriber base to 3 million.

Investec hiked its price target on the shares to 93p from 59p.

At 1410 GMT, the shares were up 10.5% at 71.70p.