Halfords drifts sideways ahead of Q1 trading statement

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Halfords drifts sideways ahead of Q1 trading statement

After a stellar set of full-year numbers, analysts and investors are looking to Halfords to provide a spark for the share price.

Source: Bloomberg

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 06 September 2021 

Halfords was one of the great beneficiaries of the pandemic, seeing its share price surge 700% to its July 2021 peak above 400p. Since then, the company has seen a modest decline, leaving the overall uptrend intact.

As the UK economy returns to normality, investors will be hoping that the potential drop-off in cycling activity is offset by a revived performance in the motoring division. Traffic levels are returning to pre-pandemic levels, albeit slowly, which gives hope that sales will continue to rebound to a degree. At around 12 times forward earnings the shares remain around their five-year average, a drop from the 15 times seen over the summer this year.

Halfords shares fell sharply in July, breaking below rising trendline support from March 2020. However, they found support around 337p, a level which has held since then.

Gains have been capped around 380p for the time being, leaving the shares in a relatively tight range that has yet to provide an indication of the next move. Above 380p, 435p comes into view, the high from the summer, while a break lower heads towards 298p and then 251p.

Source: ProRealTime