Is this struggling FTSE 250 stock primed for a turnaround?

Economic volatility and a cost-of-living crisis have hampered this FTSE 250 retailer but are better times around the corner?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Person holding magnifying glass over important document, reading the small print

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

FTSE 250 incumbent Currys (LSE: CURY) has been on a downward trajectory for some time. Recent economic turbulence hasn’t helped the retailer. However, I was surprised to see some good aspects in its latest report.

Could Currys shares be set to rebound and head upwards? Let’s take a closer look!

Currys shares struggle in 2023

It’s worth mentioning Currys isn’t alone in its struggles. Many stocks have suffered due to soaring inflation and rising interest rates.

Should you invest £1,000 in Ashtead Technology Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Ashtead Technology Plc made the list?

See the 6 stocks

However, as a retailer of technology and home goods, the current cost-of-living crisis has had a material impact on it and similar businesses.

As I write, Currys shares are trading for 49p. At this time last year, they were trading for 56p, which is a 12% drop over a 12-month period. However, since volatility began to hurt markets, the shares have slipped 39% from 81p in March last year to current levels.

Created with Highcharts 11.4.3Currys Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Trading update and ongoing risks to bear in mind

Currys released an interim report for the half-year ended 28 October 2023. At first glance, it didn’t make for great reading. Like-for-like sales dropped by 4% and reported revenue dropped by 7% compared to the same period last year and the business reported a loss overall.

However, digging deeper, the business reported that adjusted earnings before interest and tax (EBIT) increased to £31m, which is a 7% increase compared to last year. Original expectations were for it to fall from last year’s levels. I reckon this was helped by improved sentiment and operations in its Nordic region, which saw EBIT increase nicely. Furthermore, the business managed to boost liquidity by lowering costs, and a lower tax bill also helped in this regard. Increased liquidity is always positive, in my eyes.

I must admit there are still challenges and risks when it comes to Currys shares. Ongoing pressure in the economy may continue to impact sales as the current cost-of-living crisis shows no real signs of slowing down. Consumers are more occupied with paying higher food and energy costs than perhaps looking to replace their TVs. This could continue to hurt Currys.

In addition to this, competitors have taken a huge chunk of Currys’ once-dominant market share away. This is linked to the rise of e-commerce and online-only competitors. These firms can potentially undercut Currys on price as they don’t have to worry about expenditure linked to brick-and-mortar retail outlets, on which Currys relies heavily.

What I’m doing now

I have to admit that Currys shares do look tempting on a price-to-earnings ratio of just over six. Buying the shares now could be a potentially shrewd long-term recovery play.

However, I’m not planning on adding the shares to my holdings anytime soon. For me there’s still too much uncertainty around the economic picture as well as increased competition. These factors make me believe the shares will continue to struggle before any potential recovery could occur, if at all.

I’ll be keeping the shares on my watch list and continue to monitor developments.


Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Young Asian woman with head in hands at her desk
Investing Articles

With the FTSE 100 and S&P 500 nearing all-time highs, is it only a matter of time until a stock market crash?

Edward Sheldon's expecting some stock market volatility in the second half of 2025 given recent moves higher, but he's not…

Read more »

Emma Raducanu for Vodafone billboard animation at Piccadilly Circus, London
Investing Articles

Here’s why I’m getting excited about the Vodafone share price!

As a long-suffering shareholder in the telecoms group, our writer explains why he’s becoming increasingly enthusiastic about the Vodafone share…

Read more »

Lady wearing a head scarf looks over pages on company financials
Investing Articles

Investors could get a second chance at this top passive income stock

Having missed an opportunity to earn 9% a year in passive income by buying Admiral shares, Stephen Wright is on…

Read more »

Fathers Walking With Their Little Boy
Investing Articles

Here’s how I could realistically turn £10,000 into a passive income worth £2,000 a month

Millions of Britons invest for a passive income. I’m no different. One day I hope to draw down on the…

Read more »

Young Black man sat in front of laptop while wearing headphones
Investing Articles

Is this FTSE 100 stock at the start of a comeback?

After underperforming for some time, Rentokil shares are starting to show signs of life. Is this the start of a…

Read more »

Couple working from home while daughter watches video on smartphone with headphones on
Investing Articles

How to target an ISA that spits out £1,000 of passive income a month

Edward Sheldon details a simple four-step plan designed to provide an investor with passive income of £12k a year or…

Read more »

A hiker and their dog walking towards the mountain summit of High Spy from Maiden Moor at sunrise
Investing Articles

How much do you need in a SIPP to aim for a £3,000 monthly retirement income?

Discover how to start building a long-term retirement income in a SIPP by investing intelligently in quality businesses to head…

Read more »

Businessman hand flipping wooden block cube from 2024 to 2025 on coins
Investing Articles

Up 84% and down 53%! 2 innovative growth stocks on my ISA watchlist

Ben McPoland has been keeping an eye on these two growth stocks. After one has surged and the other crashed,…

Read more »