Berenberg raises target price on JD Sports

(Sharecast News) - Analysts at Berenberg hiked their target price on sportswear retailer JD Sports from 128p to 155p on Thursday, stating it played "an important role in the market". Berenberg said JD Sports' recently released Q2 trading was in line with consensus expectations, with the 3.0% fall in like-for-like sales reflecting "the relatively tough prior year comparative", due to the UEFA Euro football competition and Paris Olympics, which both took place in summer 2024.

The German bank, which has a 'buy' rating on the stock, stated that, as the leading sportswear distributor globally, with 80% of sales accounted for by physical stores, JD Sports provides hundreds of external sporting goods brands with "an important route to market", particularly via physical stores. As such, Berenberg said it fulfils a function that was "unmet by online marketplaces and the brands' own direct-to-consumer online operations".

Berenberg highlighted that JD has long-established relationships with many of the brands it stocks, with half of its apparel sales and 30% of its footwear sales relating to exclusive lines. It also noted that JD does not consider the direct impact of Donald Trump's ongoing tariff wars to be material, even if indirect effects remain uncertain.

"Factoring in a £14m FX hit in H1 and taking a slightly more cautious approach to our sales estimates, we reduce our current year adjusted PBT estimate by 3%, from £901m to £872m. Our outer-year profit estimates fall due to the lower base. Our DCF valuation has been reduced along with our profit estimates, from 196p to 155p, but we now move our previously cautious price target of 128p upwards. This is now in line with our DCF valuation, at 155p," said Berenberg.

Reporting by Iain Gilbert at Sharecast.com