RBC Capital downgrades Halfords, shares slump
Halfords was under the cosh on Friday after RBC Capital Markets downgraded the shares to ‘sector perform’ from ‘outperform’ and cut the price target to 220p from 230p.
"We think that Halfords remains a strong player in a space that has seen a number of challenges across the last few years," RBC said.
"We believe that near-term, it should benefit from market recovery and digital/data driven gains, but we believe execution risks remain."
RBC said the valuation now looks fair after a recent re-rating in the shares, hence the downgrade.
"We have also lowered our FY24-25e earnings per share forecasts by circa 3% given slightly lower margin expectations due to softer cycling sales and labour cost pressures."
At 0855 BST, the shares were down 4.5% at 193p.