Card Factory Shares at a ‘Deep Discount’: Analysts See Some Positives Despite Plunge

Card Factory (LON: CARD) shares plunged 27.4% on Friday to their lowest level since November 2022, leaving the stock trading at about 70p, after the retailer issued a profit warning in its latest trading statement. 

Shares are up around 4% so far on Friday, around the 72.8p mark.

Despite the sharp sell-off, analysts at Edison said the valuation now looks stretched to the downside and pointed to several mitigating factors outside the UK high street.

In a note published on Friday, Edison said Card Factory’s trading update showed that “continuing weak consumer confidence has contributed to soft footfall on the high street as it heads into its key trading period,” leading to lower-than-expected sales in UK stores. 

On the assumption that current trends persist, management now expects FY26 adjusted profit before tax of £55 million to £60 million, around 15% to 22% below Edison’s prior forecast.

While Edison described the update as “undoubtedly disappointing,” it highlighted a number of positives. 

The broker believes the weakness in the UK business appears to be “volume related,” implying that average basket values have held up despite lower footfall. 

It also noted that the performance of other parts of the group, “including Funky Pigeon, are in line with management’s expectations,” and that the retailer’s ‘Simplify and Scale’ efficiency programme is “progressing well.”

Edison has reduced its forecasts to the bottom end of management’s new guidance range and carried those lower assumptions into future years. 

Even so, it argued that the shares trade at a “deep discount” to peers, with Card Factory on a FY26 price-to-earnings multiple of around 6.1x, compared with a peer average of 12.7x.

The broker said the valuation gap suggests the market may already be pricing in a highly cautious outlook for the UK consumer.