Brokers' view: Panmure Gordon

Philip Dorgan is a fan of the beleaguered electronics retailer Dixons Retail. Noting that it is a ‘binary situation’ with both ‘pros and cons’, he argues that Dixons has ‘fundamentally improved’ over the past few years.

While acknowledging that ‘online penetration is likely to continue to grow in consumer electricals’ and that the supermarkets remain a ‘potent force’, he insists that Dixons has ‘improved its offer, its stores and its operations’ during the recession, having also ‘significantly outperformed’ the wider industry last year.

Rating the shares as a buy, Dorgan remarks that the shares ‘now trade 91 per cent below their five-year high’. However, ‘the improvement to its product, its stores and its operations that has been driven through over the last three years’ gives it a ‘reasonable chance of delivering market projections’. EPS of 1.29p and 1.99p are forecast for 2012 and 2013 respectively.

Panmure analyst reads the Mail
Analyst Alex DeGroote enthuses about Daily Mail & General Trust, the company behind the Daily Mail newspaper. Following a recent third-quarter update, DeGroote describes it as ‘slightly better than expected’, with organic revenue growth of 2 per cent and both its events and business-to-business divisions performing ‘slightly better than expected’.

With  advertising revenue only falling 7 per cent against the 3 per cent reported last year, he added that it was ‘improving’. He also notes that the Daily Mail has recently raised its cover price and ‘may also be a beneficiary of the closure of the News of the World’.