Dr Martens hits new low after Barclays downgrade
DR Martens plunged to a record low as storm clouds gathered over the British bootmaker’s outlook. On a dismal day for investors, Barclays downgraded the stock.
Dr Martens sounded the alarm over a slowdown in trading and supply chain issues in the US during the final quarter of 2022, which then led to the bootmaker issuing several profit warnings this year.
Analysts at Barclays, which also reduced the target price to 140p from 175p, said the company’s prime focus on fixing the issues in America looked challenging while industry data showed a decline in monthly visits to its website.
‘Turning around the US in a weaker macro could mean that there is too much optimism reflected in guidance for a second half recovery, creating further pressure on earnings,’ the analysts added.
Shares, which are at a record low, sank 8.8pc, or 10.5p, to 108.3p.
The high hopes that came when Dr Martens floated on the London stock market two years ago appear to be fading. The British bootmaker, known for its stylish black work boots with yellow stitching, listed to great fanfare at 370p in January 2021.
Boss Kenny Wilson said at the time: ‘The successful transformation of Dr Martens is a great story, and what is even more exciting is the huge potential ahead.’
Before his arrival in July 2018, the company made a loss of £5.7m in the 12 months to the end of March that year.
However, Wilson oversaw a remarkable turnaround as the firm bounced back to rake in profits of £17.2m a year later and £74.8m in 2020.
The stock was on the slide by October 2021 but regained some of its losses to rally briefly at the start of last year.
It was a slow start to the week for London’s main markets as the FTSE 100 rose 0.89pc, or 65.28 points, to 7425.83 and the FTSE 250 gained 0.34pc, or 60.56 points, to 17,913.65. That contrasted with the fast-moving drama in Westminster following Rishi Sunak’s watershed cabinet reshuffle that saw the return of former prime minister Lord Cameron.
British insurance giant Phoenix raised its cash generation forecasts after it merged two of its funds. Shares ascended 5.7pc, or 26.3p, to 490.5p.
Hammerson shot up 10.2pc, or 2.5p, to 27p after Sky News reported that the property landlord is in talks to sell its 40pc stake in Value Retail, the owner of Bicester Village, for around £1bn.
There was also good news for Tullow Oil, the Africa and South America-focused fossil fuel company, which secured a £ 327m five-year debt facility agreement with Glencore.
Shares rose 4.9pc, or 1.5p, to 31.9p. Glencore added 0.8pc, or 3.35p, to 430.45p.
Naked Wines received some much-needed respite after three board members bought shares in the online alcohol seller.
That included its chairman Rowan Gormley, who bought nearly £40,000 worth of stock.
Shares, which have plunged by more than three- quarters this year, rose 3.8pc, or 1.1p, to 29.75p.
Among the top mid-cap fallers were Kainos after the IT Group warned that organisations will show caution and hold back from spending on large-scale projects given the ongoing economic turmoil. It also reported that its healthcare revenues plunged 31pc to £20.4m in the six months to the end of September as NHS customers saw their budgets squeezed. Shares slumped 22.5pc, or 277p, to 955p.
Recruiter FDM Group said its performance for 2024 will be impacted by having fewer consultants assigned to clients than it hoped. Shares tumbled 18pc, or 84p, to 383p.