Broker tips: SuperGroup, Dunelm, BTG

5th Oct 2011 10:11

After Wednesday's admission by trendy fashion retailer SuperGroup that its having problems with new warehouse systems, Peel Hunt has downgraded the stock from buy to hold and placed its 1,800p target price under review.The group announced that a major problem at its new Barnwood warehouse in Gloucestershire - which has seen a "reduction both in the amount of stock and range of sizes reaching its UK stores" - will cut profits by £6-9m this year.The broker says its expects to reduce its full-year pre-tax profit forecasts from £70m to £62m, and recommends against buying the stock until the warehouse problems have been resolved.Nomura has kept its buy rating and 530p target price on homewares retailer Dunelm, saying that despite weakness in the macro environment, the firm's space growth strategy on track.Dunelm reported on Wednesday that first quarter sales had fallen 2% on a like-for-like (LFL) basis. Despite the LFL decline, the group said that a 7.3% contribution from new space drove total sales up by 5.3%."Dunelm continues to offer one of the few organic growth stories in UK retail, with high return on invested capital and double-digit earnings growth. Despite its, in our view, premium valuation, we see this as a strong long-term story in UK retail," the broker said.Peel Hunt has upgraded specialist healthcare group BTG from hold to buy, after the firm upgraded its sales guidance on Wednesday morning.The group said that sales will now be in the £160-165m range, significantly higher than the current consensus forecast of £139.6m."We see solid support from the acute care business, royalties and beads and, with the shares down more than 20% since we dropped to Hold, we upgrade back to Buy with several upside catalysts approaching," said analyst Paul Cuddon.The target price is left at 300p.BC