Debenhams Share Discussion Threads

[simon templar qc] 28/6/2017 19:25

J, if you read my post above I have provided a couple of views MA may bid but I don't know what he is doing as he has CFD's.

That is why I said take your pick!

[justiceforthemany] 28/6/2017 19:22

SimonTemplar - what on earth have you got against poor Debenhams? Posting negative comments day and night here yet you deny to have a short on it?! Have they shafted you in the past? Perhaps they sacked you? Working for a shorting hedge fund now?

[simon templar qc] 28/6/2017 18:42

Ashley increases his CFD's only he knows why in the meantime the TMF sees massive downgrades..



Take your pick!

[simon templar qc] 27/6/2017 23:12

To be perfectly honest guys the company performed slightly better than I expected however the economy is still set to deteriorate. So my price target of yesterday of 39-42 range bang on for the time being.

I see a bobbing around at this level for some time then if we see a share price less than 40 for a few days the market worsening.

The minute the share price falls to the mid 30 level the signs are the company heading for deep trouble.

My gut feeling is there will be a further profit warning in the Autumn nearer results.

edit:

[...]

Squeeze on consumers is likely to get worse before it starts to ease
Howard Archer, chief economic advisor to the EY ITEM Club, said: “The squeeze on consumers is likely to get worse before it starts to ease.”
Archer added: There is some support for consumer spending coming from current decent employment growth, but it is questionable if this can continue in the face of weakened UK economic activity, increasing business uncertainty and concerns over the UK’s economic outlook.”
In contrast to Carpetright, Debenhams saw its shares fall by nearly 3% as the department stores operator’s third quarter sales decline disappointed investors and it warned full-year profits could be at the lower end of estimates if current volatile market conditions on the high street continues.
READ: Debenhams cautions over 'current market volatility' on the high street
Sergio Bucher, Debenhams CEO, who took over in October, said: "As industry data has confirmed, May was a tough month for retailers and we continue to see volatility in trading week to week.”
He added: “As a result we are focused on delivering cost control and self-help through our ‘Fix the Basics’ plan.”
Task for Debenhams boss looks more difficult
George Salmon, equity analyst at Hargreaves Lansdown said: “After choosing to leave his position at the top of Amazon’s European fashion division to take over as CEO at Debenhams, we can assume Sergio Bucher likes a challenge. However, the task in front of him now looks all the more difficult.”
The analysts added: “Recent figures from the ONS show sales volumes in the retail industry are growing at their lowest level for 4 years, and Debenhams is feeling the pinch. Trends in its key sales metrics have gone into reverse in recent weeks.”
There was some good news for Debenhams from strong digital sales growth, up 7.9% for the 15 week period to June 17 , and 12.6% for the 41 weeks to the same date, driven by mobile demand which was up 47% year-on-year.
Salmon pointed out: “The new CEO’s strategy, namely to improve the online offering, declutter the stores and step up the quality of the in-store service, seems sensible.
“However, Debenhams has struggled for years. Particularly in these difficult times, we feel investors should remember that it's one thing to correctly diagnose the problem and quite another to successfully apply the cure.”

[edmundshaw] 27/6/2017 18:14

Elsa. And a PE of 9 would cover that risk while still showing a better earnings than utilities on a PE of 11-12. That is 50% higher or 60p+.

Current price is factoring in a rapid long term decline. Pays yer money, takes yer choice.

[niggle] 27/6/2017 17:29

Unless it drop Elsie

[elsa7878] 27/6/2017 17:17

No profit progression. That's fine. On a PE of 6 you don't need it.

[simon templar qc] 27/6/2017 17:06

No profit growth for 3 years says Investec, no "silver bullet"



The only upside risk a possible bid imo, however who would bid for a bricks and mortar with such a big portfolio of High St Sops.

edit:

More views and comments:

Photiades rates both Carpetright and Debenhams a 'hold' (210p and 55p target prices respectively), but Investec today slashed its target for the latter by 15% to 39p, questioning the sustainability of its dividend.
Currently, the stock's forecast yield for 2017 is 8.2%. That halves, though for both 2018 and 2019, with the dividend per share dropping from 3.4p to 1.7p.
Analyst Kate Calvert questions the wisdom of keeping the divi flat this year, given a cut would give management more financial flexibility to speed up or increase its core infrastructure investment.
"We see no silver bullet for Debenhams' structural pressures," she added. "A five-year strategy has been set out to fix the basics, which may well end up just being a profit stabilisation strategy. It is hard to see any real profit progression in the next three years."

[simon templar qc] 27/6/2017 16:42

Hedge funds increase short selling in retailers...

[skinny] 27/6/2017 15:47

Peel Hunt Hold 43.38 50.00 50.00 Reiterates

Liberum Capital Hold 43.38 58.00 58.00 Retains

[gswredland] 27/6/2017 15:46

Yep definitely not getting in yet!!

[mister md] 27/6/2017 15:13

Well you can wait to buy when consumer confidence is strong & retailers upbeat , shareprice is high and yield low. I know what I prefer ...

[justiceforthemany] 27/6/2017 14:15

Even if profits do come in 'at the lower end of expectations' EPS will still be around 7p which gives an ultra-low P/E around 6 with the current share price of 43p.

Current dividend yield at 43p is 7.9%
Dividend cover of 2.3x
Cash of ~ £60M and low net debt around 10% which IMO makes any cut unlikely

Even after factoring in weaker sales and the data above I believe the share price here should be 60p+ (P/E would still be <10) & certainly would be if shorts were not already at 12%+

[simon templar qc] 27/6/2017 11:18

John Lewis (clothes household electrical) down 0.5% last week...



When you read Debenhams statement carefully current sales worsening. I did say they would warn and I think they will again come results.

Dividend bound to be cut or reduced imo if they plan to close some stores they will have to take a further hit.

[niggle] 27/6/2017 10:24

It's all hanging on what's happening now and whether they hold the dividend. TBH I expected much worse. He's saying all the right things but RNS full of BS unfortunately as you would expect from a man who can't dress himself to speak.

[montyhedge] 27/6/2017 09:51

Profit warnings have a habit of coming along in threes, dividend will go I would have thought or cut still 4% even if halved. Out of the FTSE 250 so I suppose some funds have to sell.

[gswredland] 27/6/2017 09:50

Surely won't be able to sustain the dividend? At this price advfn showing nearly 8%!

[gswredland] 27/6/2017 09:50

Surely won't be able to sustain the dividend? At this price advfn showing nearly 8%!

[skinny] 27/6/2017 09:26

Peel Hunt Hold 43.13 50.00 50.00 Reiterates

Liberum Capital Hold 43.13 58.00 58.00 Retains

[1fox1] 27/6/2017 09:20

ST. I take my hat off to you sir. You have called this spot on.

[1fox1] 27/6/2017 09:19

Is 20-30p a possibility? Hmmmmmm I wonder. RNS full of company speak clap trap. Would not be a buyer just now. 40p is the next stop