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After a terrible 2018, one that saw the stock plunge nearly 41% in the space of a year, Card Factory shares have found themselves ranging between £1.75 and £2 in 2019, with brief forays either side of those levels.

Card Factory shares now sit at a current trading price of £1.79.

Investors were happy with January’s statement, despite the company itself labelling it ‘a robust Christmas trading period in a challenging consumer environment’. While year-to-date group revenue rose 3.4%, that was down on the 5.9% managed at the same point in 2018; worse was its like-for-like situation, with comparable sales actually falling 0.1% against the 3% increase posted the year previous.

And though it kept its full year underlying EBITDA expectations unchanged at £89 million to £91 million, its outlook for the upcoming financial year was troublesome. Expected ‘cost challenge’s, like the National Living Wage and electricity wholesale prices, will result in a £5 million to £6 million hit, while ‘the current consumer and macro-economic backdrop’ means Card Factory is anticipating ‘another difficult year’ in FY20.

If the firm is to avoid a drubbing on Tuesday, then it could really do with reaching the top end of those underlying EBITDA forecasts (at the £90 million mid-point it’d already be a 4.3% decline year-on-year). That, ideally alongside a slightly more positive phrasing for its FY20, something that admittedly might be hard to come by.

Card Factory shares have a consensus rating of ‘Sell’ alongside an average target price of £1.60.

This article is brought to you in association with Spreadex. All opinions expressed in this article are from the author and do not necessarily represent the opinions of The Armchair Trader. You can find out more about Spreadex products and services here, or find more articles from Connor Campbell here.

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Connor Campbell

Connor joined Spreadex in 2014 as part of a newly expanded financial analyst team after graduating from the University of Southampton with an MA in English. His focus is on providing Spreadex's customers with up-to-date and informative news, and is responsible for the market analysis found on the Spreadex website.

Connor produces three daily market updates, a daily stock earnings preview, a weekly financial market preview piece every Friday, a round-up of all the big financial stories making the weekend press every Monday morning and regular stock market features.

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