The Frasers (LON: FRAS) share price went parabolic after the company published strong quarterly results. The shares jumped by more than 15%, its best single-day jump in years. It is trading at 873p, which is the highest it has been on record. As a result, the company’s market cap jumped to over 4.1 billion.
Frasers Group is one of the biggest retailers in the UK. The firm, which was started by Mike Ashley, owns some of the best brands in the country like Sports Direct, House of Fraser, Sofa.com, Frasers, Flannels, and Game among others.
In a statement, the company said that its business did significantly well in its FY22. Its revenue surged by 30.9%. Excluding acquisitions and on a currency-neutral basis, the firm’s revenue jumped by 31.2%.
This strength was mostly driven by its premium lifestyle division that is known as Flannels. Its revenue jumped by 43.6%. It was followed by its sports retail division whose revenue rose by 31.2%. European retail rose by 28.4%.
In total, Frasers Group said that its profit before tax rose from £8.5 million to over £366.1 million. This performance was driven by the broad reopening of the company. Most importantly, its total assets rose to more than £1.3 billion. In a statement, the firm’s CEO said:
“It’s clear that our elevation strategy is working and we are building incredible momentum with new store openings, digital capabilities, and deeper brand partnerships across all our divisions.”
Still, there are two key risks to Frasers share price. First, with UK inflation surging, there is a possibility that the company will see a slower growth this year. The management expects that it will have a profit before tax of between £450 million and £500 million. Second, as a leading importer, the company’s business will be affected by the weak sterling.
Frasers share price forecast
The daily chart shows that the FRAS share price went parabolic on Thursday. This jump saw its price cross the important resistance level at 826p, which was the previous all-time high. The stock has moved above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has jumped to the overbought level.
Therefore, the shares will likely keep rising as bulls target the key resistance level at 1,000p. A drop below the support 826p will invalidate the bearish view.
The post Frasers share price went parabolic. It could soar to 1,000p soon appeared first on Invezz.