RBC Capital lifts Currys to ‘outperform’

"Currys' financial leverage and travails in the Nordic region have left it firmly in the investor ‘no-fly zone’ in recent years," RBC said.

However, the retailer’s sale of its Kotsovolos business in Greece will leave it with a net cash position.

"Plus, it retains a strong relative market position in a sector ripe for consolidation, and valuation looks very undemanding," RBC said.

It pointed out that Currys trades at a "lowly" rating of less than 4x EV/EBIT, at the lower end of its historical range.

"We think this fails to capture its strong position in the UK and self-help and recovery potential in the Nordics," it said.

It also noted the recent stake-building in the sector, with Frasers Group having built a stake of around 13% in Currys.

The bank noted that the consumer electricals subsector faces a number of long-running challenges, including a low margin for error, very strong supplier power "and the often commodity nature of the product".

"But Currys remains a strong omnichannel player, with high market shares of 28% in the Nordic and 24% in the UK," it said. "It has scale and distribution advantages, plus strong supplier support to showcase products. These should serve it well in a more benign outlook for interest rates in major markets."

At 1000 GMT, the shares were up 2.3% at 49.46p.