Halfords Group PLC (LSE:HFD) is attracting renewed broker confidence after Panmure Liberum raised its target price to 260p from 190p on the motor and cycle retailer.
The broker maintained its Buy rating on the shares, which closed at 217p on 25 June, signalling meaningful upside potential from current levels.
Panmure Liberum also lifted its FY27 pre-tax profit forecasts to £54 million, placing them slightly ahead of the company’s own upgraded guidance range.
“Following the recent results, we make an underlying upgrade of 6%, taking our forecasts a touch ahead of the newly upgraded guidance range,” analysts said.
The broker attributed the upgrade to several operational drivers, including remaining Fusion garage conversions and modest like-for-like growth in Cycling.
Panmure Liberum also pointed to the broader application of Fusion learnings across the Autocentres estate as a key factor supporting the improved outlook.
A cleaner earnings picture is also emerging, with analysts noting that tyre performance is beginning to stabilise and cost pressures are gradually easing across the business.
“With tyres finally showing signs of stabilisation, all areas of the P&L are now moving in the same direction, while moderating opex should provide further support,” analysts added.
Retail like-for-like sales rose 4.1% in FY26, with Cycling advancing 6.4% and Motoring growing 2.9% over the same period.
In Autocentres, excluding Avayler, like-for-like sales grew 5.8%, while EBIT increased 20% to £18.9 million, reflecting strong operational execution.
Management is steering the Retail division toward more disciplined category management, with renewed emphasis placed on cycling and the fast-growing e-bikes segment.
Within Autocentres, strategic focus is shifting away from the Fusion rollout toward broader garage optimisation, with the final 35 Fusion conversions expected to complete in FY27.
Panmure Liberum highlighted that the shares still offer a forecast 12% three-year EPS compound annual growth rate alongside a 6% dividend yield, supporting the higher target valuation.
