Broker snap: Investec trims targets for Halfords but stays a buyer

19th Jul 2012 11:13

While shares of car and bike parts retailer Halfords jumped on Thursday morning, Investec has slashed its target price by over a quarter.Halfords Retail sales fell by 7.5% on a like-for-like (LFL) basis in the first quarter, which Investec labelled as "in line, albeit weak". The uncertain backdrop lead the group to cut its pre-tax profit guidance to £62-70m, compared with consensus estimates of £76m.As such, Investec has downgraded its forecasts by 20% to the bottom of that range. As such, the target price falls from 310p to 225p.The company also announced that its Chief Executive Officer (CEO) David Wild is leaving with immediate effect, with Dennis Millard stepping in as interim Executive Chairman.The broker said: "FY13E looks set to be tough, and clearly a change of CEO adds an element of uncertainty to the business. However, the strategy is unchanged, cash generation remains strong, supporting our unchanged dividend forecast, and early feedback from the three Lab stores has been 'encouraging'."Investec has retained its 'buy' recommendation for the stock.Shares were 7.9% higher at 213p by 11:12.BC