J D Wetherspoon plc : A trading opportunity
Entry price | Target | Stop-loss | Potential |
---|
GBX 785.85 |
GBX 831 |
GBX 764 |
+5.75% |
---|
Fundamentals on JD Wetherspoon show a strong company. Sales and profitability are increasing. Thus, revenues are expected to grow of 25% by 2016, reaching GBP 1.6 billion. Moreover, margins are improving as net margin should finish at 4.7% at the end of 2016, from 3.6% last year. Furthermore, the activities of the company are increasing as analysts have revised upward their revenue estimations for the coming years. The company offers interesting valuation levels considering the EV/Sales ratio at 1.03 for 2015 estimates.
Technically speaking, the share shows a bullish configuration in the medium and long term. The recent consolidation phase was stopped by the GBp 785. As weekly moving averages are well-oriented, a reversal can be anticipated with the stock quickly rebounding towards GBp 831.
Therefore, investors could take a buyer position on this level in order to profit of an interesting entry point. The target will be GBp 831 and a stop loss will be placed under the Gbp 771 support level in case of further correction.
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