Card Factory Shares: Up 18% This Year, Is It One to Watch?

Card Factory (LON: CARD) has seen an 18% rise in its share price this year. With ambitious plans to expand, should investors be keeping an eye on the stock?

In a research note released in June this year, analysts at Edison Group said the company aims to be the UK's leading omnichannel retailer of greeting cards, gifts, and celebration essentials, while also expanding its reach into international markets.

The firm explains that CARD's strategy is focused on diversifying into larger markets and leveraging its brand appeal across geographies.

For example, CARD's ambitious goals include making Card Factory the UK's top destination for quality, value, and convenience, while also growing its online presence and international footprint.

Furthermore, Edison says the company is making solid progress toward its FY27 targets, which include a compound annual growth rate (CAGR) of 9% for revenue and 17% for adjusted profit before tax (PBT).

The FY24 results were promising, with revenue growth of around 10% and adjusted PBT growth of approximately 27%. This growth, along with improving cash generation, has allowed the company to resume paying ordinary dividends, further boosting investor confidence.

In those FY24 results, Card Factory CEO Darcy Willson-Rymer stated: “Now, three years into our ‘Opening our New Future Strategy', cardfactory is financially and operationally a much stronger business.”

“We have confidence in our strong value and quality customer proposition, and remain on track for both this financial year and for achieving our FY27 targets outlined at our Capital Markets Day in May last year.”

Despite its growth prospects, Edison told investors in June that Card Factory was trading at a significant discount compared to other specialty retailers and its own historical valuations. However, even though the stock is up 30% in the last month, Edison believes there is further upside to go.

The firm's analysis suggests that the stock could rise to 180p per share, making it a potentially attractive option for investors seeking growth and value.