Currys Plc (LSE:CURY) shares climbed more than 2% on Tuesday after RBC Capital Markets upgraded the electricals retailer to “outperform” from “sector perform” and increased its 12-month price target to 180p from 165p.
The broker said the upgrade reflects improving earnings prospects, a stronger balance sheet and growing confidence that the company is moving beyond its recovery phase into a period of sustained growth.
RBC Raises Earnings Expectations
RBC lifted its FY27 earnings per share forecast by 5%, citing expectations that cost pressures will continue to ease, supporting stronger profitability. The broker now forecasts earnings per share that are between 6% and 8% above current market consensus for FY27 and FY28.
The investment bank expects adjusted diluted EPS to increase from 13.44p in FY26 to 14.75p in FY27 and 16.40p in FY28.
Revenue is forecast to rise from £9.34 billion in FY26 to £9.75 billion in FY27 before reaching £10.01 billion in FY28. Adjusted profit before tax is projected at £190.9 million in FY26, increasing to £204.5 million in FY27 and £222.2 million in FY28.
“Currys is transitioning from being a recovery play to a likely multiyear compounder with strong cash returns,” RBC said.
Market Share Gains Support Growth Outlook
According to RBC, Currys increased its UK market share by 50 basis points during the first 36 weeks of FY26. The broker attributed the improvement to strength across mobile, computing and domestic appliances, alongside growing adoption of consumer credit products and continued expansion of its business-to-business operations.
Credit penetration rose by 200 basis points to 25%, providing an additional driver of customer engagement and sales growth.
iD Mobile Adds Strategic Value
Currys’ mobile virtual network operator, iD Mobile, continued to perform strongly, growing its subscriber base by 18% year-on-year during FY26 to reach 2.6 million customers.
Using a valuation of £100 per subscriber, RBC estimates iD Mobile is worth approximately £260 million. That figure equates to around 16% of Currys’ current enterprise value and would reduce the company’s CY26 EV/EBIT multiple from 5.5x to 4.5x.
Nordic Operations Continue to Strengthen
RBC also highlighted improving prospects in the Nordics, where Currys operates through its Elkjop and El Giganten brands and holds leading market positions across the region.
The broker increased its FY27 Nordic EBIT forecast by 4%, citing Currys’ estimated 37% market share in Norway and 25% share in Sweden. Consumer spending in the region has been supported by interest rate cuts and temporary reductions in food VAT.
RBC noted that the company controls more than 50% of the market for televisions and AI-enabled laptops through its Giganten business.
Strong Balance Sheet Supports Shareholder Returns
Currys is expected to finish FY26 with net cash exceeding £170 million, a significant improvement from the net debt position of more than £800 million recorded at the end of FY20.
RBC expects the retailer to return capital to shareholders through £50 million share buyback programmes in both FY27 and FY28. The broker also forecasts dividends per share rising from 2.25p in FY26 to 2.75p by FY28.
Valuation Suggests Further Upside
RBC’s 180p target price is based on a blend of valuation approaches, including a discounted cash flow model implying a value of 177p per share using a 10% weighted average cost of capital and a zero-growth terminal assumption, alongside a sum-of-the-parts valuation of approximately 187p.
The shares currently trade on around 10.5 times CY26 earnings. RBC outlined a downside valuation scenario of 115p per share and an upside case of 225p.
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