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LONDON - Woolworths Group, whose 820 UK stores sell goods ranging from household appliances to children's clothes, fell in London trading as Credit Suisse Group cut its price estimate on the shares by 50 per cent.
Credit Suisse analyst Tony Shiret lowered his target on the retailer's stock to 11.5p from 23p and maintained his "underperform" rating. Woolworths shares dropped 1.9 per cent, adding to their 62 per cent decline in 2007.
"Our previous price target for Woolworths was based on recovery potential within the company," Shiret wrote in a note to investors yesterday. "We now see a growing risk that the retail chain may struggle to achieve this."
Last year's drop in Woolworths' shares was the second- biggest in the FTSE All Share General Retailers Index, which fell 26 per cent on concern Britons may pare their spending.
UK consumer confidence dropped the most in at least three years in November, hurt by rising credit costs and spiralling food prices.
Woolworths stock fell 0.25p to 12.75p in London, nearing last month's record low of 11.75p.
Credit Suisse's Shiret also cut his price estimate for Home Retail Group, the owner of Argos and Homebase stores in the UK, by 16 per cent to 360p. Home Retail slid 7.75p to 320.25p.
Non-food retail stocks will probably "drift down with profit forecasts" according to Shiret.
- Bloomberg
