Analysts at RBC Capital Markets see scope for further consolidation among European consumer tech retailers, and have reiterated an "outperform" rating on Currys PLC (LSE:CURY).
The 195p price target is about 32% above the 148p share price on 22 October.
The odd one out
Currys, the electricals retailer operating in the UK and the Nordics, is the only one of Europe's three major players with no recent bid.
JD.com, the Chinese retailer, is buying Ceconomy, owner of MediaMarkt and Saturn, with final EU approval due on 4 November.
Fnac Darty has agreed to be acquired by EP Group, the vehicle of Czech billionaire Daniel Kretinsky, and the tender offer closes on 9 November.
RBC noted that Reuters reported in 2024 that activist investor Elliott and JD.com were both exploring bids for Currys.
The analysts argue the three groups barely overlap geographically, and that the top three players in most markets hold less than 40% share.
What a deal could be worth
RBC estimates a Currys and MediaMarktSaturn combination could yield about £120m of buying synergies, based on a 0.5% saving on combined cost of goods sold.
That compares with its forecast of about £270m for Currys' operating profit this year.
For every 0.2 to 0.3 percentage points of extra operating margin at Currys, RBC calculates consensus earnings per share for 2028 and 2029 would rise by 8% to 12%.
Trading holds up
Currys' UK like-for-like sales rose 6% in the first 17 weeks of its financial year, in a flat market.
Chip prices have risen about 50% since last summer, which RBC says is a concern for demand, though higher-priced products should lift sales of add-on services.
RBC forecasts adjusted pre-tax profit 3% to 5% above consensus for the next two financial years, at £208m and £227m.
Its upside scenario is 235p a share and its downside is 125p.
