Dixons Carphone not looking so cheap compared to EU peers, says Barclays

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Dixons Carphone PLC (LON:DC.) was downgraded to ‘equal weight’ from ‘overweight’ by Barclays as analysts think the risk/reward is not attractive enough.

The bank said the stock no longer looks particularly cheap compared with its European peers after the share price performed very well over the past 12 months.

READ: Dixons Carphone to close travel business permanently after UK axes duty-free shopping

It also reckons the newsflow will be mixed over the next few months given the more challenging basis of comparison, while free cash flow generation will likely be muted this year.

The owner of Currys PC World and Carphone Warehouse posted a sales increase of 12% in the 25 weeks to 24 April, with online sales more than doubling.

However, it will permanently close its travel business after the UK government axed duty-free shopping, as it does not expect passenger numbers to recover enough to compensate for the removal of airside tax-free shopping by the UK government from 1 January.

Shares dipped 3% to 141.7p on Thursday late morning, having recovered to pre-pandemic levels and up 75% from April 2020.

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