- JD Sports Fashion
- 26 September 2023 10:36:30
Source: Sharecast
The broker noted that JD posted "strong" interim results, substantially outperforming peers in a challenging market.
"We believe that this performance, set against some misinformed wider market noise, positions the company for further market share gains and the delivery of significant total shareholder returns through organic revenue growth, as well as targeted bolt-on M&A.
"Unlike other sports retailers, JD benefits from excellent supplier relations, a diversified product range, superior store portfolio and a robust online presence. Its pricing power also notably exceeds that of US competitors - such as Dick’s Sporting Goods & Foot Locker."
Shore Capital - which rates the shares at ‘buy’ - said that given the stock is trading on an FY25F EV/EBITDA ratio of just 3.8x, a price-to-earnings of 9.4 x, and a free cash flow yield of 15%, it believes it is "materially undervalued".