Currys (LON: CURY) is poised to make significant advancements in the marketing of Microsoft’s Copilot+PC range of services as the exclusive UK partner. This newly launched Microsoft product, which debuted in 2023, has garnered considerable market awareness and attention.
Copilot is an AI-powered tool specifically designed to integrate with Microsoft 365 applications and Bing, providing users with support for productivity, creativity, and communication tasks across Windows, Mac, Apple iOS, and Android platforms.
About Currys
Currys is a prominent omnichannel retailer of technology products and services, conducting operations through online channels and 719 stores across six countries. In the UK&I, it operates as Currys, and in the Nordics, it trades under the Elkjøp brand. The company holds market leadership in each of these regions and employs approximately 24,000 group colleagues. With a market capitalisation of £877m, Currys’ operations are supported by a sourcing office in Hong Kong, state-of-the-art repair facilities, and an extensive distribution network for rapid and efficient delivery to stores and residences.
Recent Financial Performance
In its latest financial report for the fiscal year ended 27th April, Currys reported a 4% decline in group revenues to £8.48bn, while enhancing its adjusted pre-tax profits by 10% to £118m, and earnings per share of 7.9p. CEO Alex Baldock expressed satisfaction with the company’s performance, highlighting encouraging momentum in the UK&I, progress in the Nordics business, and improved financial stability. He also noted the company’s growth in sales of solutions and services, particularly leveraging Currys’ competitive advantages and contributing to recurring revenues.
Analysts’ View
Analysts Wayne Brown and Anubhav Malhotra at Panmure Liberum have designated a Buy rating for Currys’ shares, with a Price Objective of 135p. They are particularly optimistic about the potential benefits of Currys’ exclusive partnership with Microsoft for the launch of the Copilot+PC range. Meanwhile, analysts at Deutsche Bank, led by Adam Cochrane, have upgraded their rating for Currys’ shares, citing the potential for replacement cycles in electronics and the company’s improved positioning to benefit from increasing demands for electricals.
Future Prospects
Looking ahead, analysts estimate that Currys’ sales could reach £8.37bn for the current year ending in April 2025, with adjusted pre-tax profits rising to £130.2m and earnings per share of 8.7p. By 2026, sales are projected to reach £8.54bn, with profits increasing to £155.1m and earnings per share at 10.3p.
In Conclusion
As Currys approaches its upcoming Annual General Meeting on Thursday 5th September and releases its Trading Update, there is anticipation for further upward movement in the company’s shares. With substantial professional and institutional ownership, as well as a strong shareholder base, Currys is well-positioned for growth. The company’s shares are currently undervalued, especially with its tighter management and potential for foreign interest. Furthermore, the estimates for group earnings over the next three years indicate that the stock is undeniably cheap. Overall, the future looks promising for Currys as it continues to expand its partnership with Microsoft’s innovative AI technology.