City broker view – DSG International

Following the interim results from DSG, Pali International has trimmed its target price on the group from 22p to 20p.

The broker indicates that a sum-of-the-parts calculation has historically been the right way to look at DSG but with the current lack of visibility on forecasting from a batch of divisions that are making losses this could now be deemed unreliable.
After the latest downgrades to forecasts Pali has nudged its sum-of-the-parts valuation down to 25p per share, which when you factor in the typical 20% discount for conglomerates then this suggests a price target of 20p. This compares with an underlying share price of 23.75p following the 7% fall in early trading today (October 24).

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