Premier Farnell plc : Ready for a technical rebound
Entry price | Target | Stop-loss | Potential |
---|
GBX 204.4 |
GBX 0 |
GBX 194.17 |
-100% |
---|
In the past few sessions, Premier Farnell shares have suffered from a sharp fall but the rebound engaged on GBp 200 could reverse this trend.
From a fundamental viewpoint, Premier Farnell seems undervalued in terms of enterprise value. In facts, its EV/Sales ratio for 2015 is 0.99. Moreover, the group stock is currently paid 13.5 and 11.3 times the next two years earnings. Perspectives on the activities are good as sales and margins are expected to increase in the coming years. The analysts’ consensus is largely buyer and the average target price offers a 19% potential.
Technically, in daily data, even if moving averages are still in a downtrend, the positive reaction in the GBp 200 area should reverse this bearish trend. Moreover, technical indicators show a significant oversold condition which strengthens the idea of a return to GBp 217.5.
Therefore, a long position could be taken at the current price targeting GBp 217.5. Nonetheless, a stop loss will be placed under GBp 200.
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