Card Factory Shares Offer 64% Upside, Says Edison

Card Factory’s shares could see around 64% upside, according to analyst firm Edison, which reaffirmed its bullish stance on the retailer, citing compelling valuation, attractive medium-term growth prospects, and a strengthened balance sheet.

Edison said Card Factory’s transformation strategy is gaining momentum, with progress across its UK and international operations, supported by the recent acquisition of funkypigeon.com, which it expects will “provide a meaningful fillip to its online capabilities and growth aspirations.”

“Card Factory’s attractive medium-term growth prospects and rapidly de-gearing balance sheet provide plenty of flexibility in how to deploy its capital above and beyond existing cash returns,” wrote Edison analyst Russell Pointon. 

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Despite this, the broker believes these strengths are “not reflected in its valuation,” estimating 64% upside to its revised DCF-based valuation of 169p per share and pointing to a double-digit equity free cash flow yield.

“There is a clear valuation disparity between CARD and its quoted peers with a c 45% discount using P/E multiples despite our forecasts for comparable revenue growth and higher profitability,” stated the firm.

Edison’s model assumes the group will move into a net cash position by FY28, helped by strong free cash conversion of 70–80% of adjusted earnings.

Card Factory’s new medium-term guidance targets mid-to-high single-digit profit growth after FY26, implying margin expansion alongside steady revenue growth. 

Pointon commented that the company’s strategy to reach “more customers in more markets” and leverage its vertically integrated model positions it well for sustainable growth.