1335 Monday 12 November 2018
Today, Berenberg have issued a sell recommendation on Sports Direct (SPD.L) and their note has appeared to gain some traction on the trading floor.
According to the analysts at Berenberg, major brands within the sports clothing and equipment market such as Nike and Adidas with put more focus on direct sales rather than the 3rd party model that Sports Direct relies on.
They have also stated that they are unconvinced by SDP’s ambition, seeing them towards the bottom end of the wholesale market and holding a weak online proposition. These two scathing criticisms combined with popular bands adopting a direct to consumer (DTC) model have been underlined by Berenberg seeing JD Sports and Amazon as the biggest threat to Sports Direct’s business.
SPD opened the day at just over 319p, but have slipped 10% in trading today, currently sitting at 292p. The Berenberg target price for the stock is 270p and investors are now faced with a tricky decision. Traders already holding positions with SPD may wish to offload before incurring further losses, however they and those not currently holding positions may consider that SPD may have hit a floor and will be looking for the price to rebound.
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