December 12, 2008 / 9:30 AM / 11 years ago

Citigroup and Altium cut targets on JJB Sports

Pedestrians walk past a JJB Sports shop in Kingston-Upon-Thames, southern England April 16, 2008. REUTERS/Stephen Hird

(Reuters) - Citigroup and Altium Securities cut their price targets on sportswear retailer JJB Sports JJB.L and recommended that investors sell the shares.

Citigroup cut its price target on JJB Sports to 1 pence from 20 pence, saying current trade was deteriorating and the lifestyle division was losing money.

“JJB’s fate seems to be in the hands of their lending banks, a predicament that could leave the shareholders with little equity value,” Citigroup analyst Ben Spruntulis said in a research note.

“A lot now hinges on the value that can be achieved from the disposal of the leisure division,” the brokerage said.

Altium cut its price target on the stock to 8 pence from 10 pence.

“Given the lack of clarity on the profit outlook and the negotiations with the banks, we cannot justify holding the shares,” Altium analyst David Stoddart said in a note.

In a quarterly rejig by index compiler FTSE on Thursday, struggling retailers JJB Sports, Clinton Cards CLCA.L and Blacks Leisure BSLA.L were dropped from the small-cap index to the even smaller FTSE Fledgling index after enduring a tough year as consumers cut back on spending amid rising unemployment, falling house prices and higher utility bills.

The reshuffle, based on Tuesday’s closing share prices, is to take effect after the market close on December 19.

Shares of JJB Sports remained untraded on Friday after closing at 9.24 pence on Thursday on the London Stock Exchange.

Reporting by Srikanth Srinivasa in Bangalore; Editing by Mike Miller

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