Hargreaves Lansdown says brokers may upgrade Home Retail

13th Mar 2014 11:47

Broker Hargreaves Lansdown said the City may upgrade its forecasts for Home Retail as the Argos and Homebase retailer forecast better-than-expected annual profits.Outgoing Chief Executive Terry Duddy said on Thursday that a good January and February would help the group to announce pre-tax profit in the year to March 1st slightly ahead of the top end of market expectations of between £107m and £111m. Hargreaves said online sales at Argos were on an upward trajectory, while Homebase appeared to be another beneficiary of the British government's Help to Buy scheme and its revival of the UK housing market. Hargreaves analyst Keith Bowman cited negatives such as Argos' increasing dependence on the highly competitive electrical goods market and the 55% rise in its share price in the last year, which was testing longer-term investor faith.But he added: "For now, Home Retail remains well placed in terms of capturing the UK economy's unfolding recovery."With analyst opinion having recently cooled from a cautious buy to a hold, some upgrading of expectations could again be seen."The shares increased 11.4p or 5.6% to 216.5p at 11:45 in London.PW