Panmure Liberum has raised its target price for Halfords Group PLC (LSE:HFD) to 300 pence from 260 pence, while maintaining its buy rating on the car parts and cycling retailer.
The upgraded target follows Halfords’ announcement that it now expects underlying pre-tax profit of between £55 million and £65 million for the financial year to March 2027.
That guidance range sits comfortably ahead of the current market consensus figure of £52.6 million, a notable beat that has caught the attention of analysts.
Panmure Liberum was quick to stress that the upgrade was not solely driven by unusually warm summer weather, even as management estimated a weather-related benefit worth several million pounds.
The broker pointed instead to underlying improvements in like-for-like sales and margins exiting the previous financial year as a more durable and sustainable driver of growth.
Panmure Liberum raised its own forecasts for the year just ended by 11%, a meaningful revision reflecting the strength of trading conditions across Halfords’ business segments.
The broker also increased its estimates for subsequent years by around 4%, signalling confidence in the company’s medium-term earnings trajectory.
Looking ahead, Panmure Liberum said it would not be surprised to see further upgrades from Halfords before the end of the year, describing current guidance as retaining “some prudence.”
The broker expects continued momentum to be supported by garage conversions under Halfords’ Fusion format and the return of the cycling replacement cycle, among other factors.
Panmure Liberum also noted signs of stabilisation in tyre sales alongside moderating cost growth, adding that all areas of Halfords’ profit and loss account were now “moving in the same direction.”
That broad-based improvement across revenue and cost lines suggests the business is gaining operational traction rather than benefiting from any single tailwind.
For investors tracking the retail sector, Halfords now appears to be entering a period of more consistent earnings delivery after a challenging stretch for consumer-facing businesses.
