UK-based companies B&M European Value Retail (GB:BME) and Direct Line Insurance (GB:DLG) have received new ratings recently from analysts. Overall, DLG has a Moderate Buy rating and offers a growth rate of 35% in the share price. On the other hand, B&M carries a Strong Buy rating with a more modest upside potential of 7.6%.
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Let’s examine the details.
B&M European Value Retail SA (B&M)
B&M is a British retailer that offers customers a curated selection of top-selling items at affordable prices. The company’s product range includes groceries, general merchandise, and other food items.
Yesterday, the company announced the trading update for its first quarter of 2023. The numbers demonstrate sustained and profitable trading momentum in recent weeks. The first quarter results indicate a 13.5% growth in total group revenue, which aligns with the company’s internal projections. The company will publish its first-half earnings for 2023 in November.
Analysts feel the cost-of-living crisis has not impacted the retailer. On the contrary, the company is capitalizing on its ideal positioning to meet the growing demand from price-conscious consumers seeking bargains.
Yesterday, analysts from Stifel Nicolaus reiterated their Buy rating on the stock, projecting a growth rate of 8.5%.
Three days ago, David Roux from Bank of America Securities also confirmed his Buy rating at a price target of 675p. It implies a much higher growth of 21.18% in the share price.
B&M Share Price Forecast
According to TipRanks, BME stock has a Strong Buy rating, which is based on eight Buy and two Hold recommendations. The average price forecast is 595.5p, implying a growth rate of almost 7% on the current trading levels.
Direct Line Insurance Group PLC
Direct Line is a leading insurance company in the UK, providing its services through multiple brands.
In its trading update for Q1 2023, the company recorded a 9.7% increase in quarterly gross written premiums, reaching £805.7 million, supported by its pricing policy despite a tough motor insurance market. The company’s full-year outlook for 2023 remains challenging as it continues to face pressure from higher costs and supply chain issues. The company will report its first-half results for 2023 in September.
Barclays analyst Ivan Bokhmat reiterated his Sell rating on the stock yesterday, anticipating a downside of 24% in the share price.
On the other hand, analysts from J.P. Morgan and HSBC predict growth in the share price while maintaining their Hold rating on the stock.
Is Direct Line a Good Share to Buy?
Based on 11 recommendations, DLG stock has a Moderate Buy rating on TipRanks. It includes four Buy, six Hold, and one Sell ratings.
The average target price is 181.18p, which is 34.3% above the current trading level.
Conclusion
Analysts are impressed by the numbers issued by B&M and expect that the company is well-positioned to benefit from higher demand for affordable items.
For DLG, analysts hold a cautious approach considering the challenging motor insurance market. However, analysts also feel the stock is attractively priced and expect more than a 30% upside in the share price.
