Over the previous 12 months, 39 FTSE 100 shares have fallen in worth and 61 have gone up. General, the index has elevated by roughly 10%. That is comfortably above the five-year common of 6.2%.

Nevertheless it hasn’t been an excellent 12 months for Frasers (LSE:FRAS).

Firstly of 2024, the sports activities retailer’s shares had been altering arms for 910p. On the time of writing (13 December), the corporate’s share price is 620p. That’s a fall of 32% in just below 12 months.

Loads of the injury occurred on 5 December, when the corporate introduced that it now expects its adjusted revenue earlier than tax for the 12 months ending 27 April 2025 (FY25) to be between £550m and £600m. That was down from an earlier forecast of £575m-£625m.

Traders took fright, wiping 10.7% off the worth of the corporate. Frasers blamed “weaker consumer confidence” following the funds and warned that it confronted further “incremental costs” of £50m in FY26, on account of the Chancellor’s plans.

Nevertheless, regardless of this poor run, it’s been the twelfth-best performer on the FTSE 100 over the previous 5 years.

Execs and cons

However the shares now look low-cost to me.

Even on the decrease finish of expectations for FY25, assuming a 25% company tax fee, the corporate’s earnings per share can be 91.6p. This means a ahead price-to-earnings ratio of solely 6.9.

If the corporate was capable of attain the highest finish of its forecast, the a number of would drop to six.

In both state of affairs, I feel this can be a little bit of a cut price. In accordance with Eqvista, the common for clothes and footwear retailers is 17.8.

Nevertheless, there are some dangers.

We’ve already seen that the corporate’s share price will be unstable. A few of this may be defined by the massive shareholding (73.3%) that Mike Ashley, the group’s founder, nonetheless retains. This implies there are comparatively few shares obtainable for different traders. A big commerce can subsequently have a disproportionate impact on the share price.

I additionally wonder if the corporate’s administrators get simply distracted. With its many pursuits in different listed companies, Frasers is akin to an funding holding firm. Whether or not it intends to launch takeover bids for any of them is unclear. However the hypothesis definitely makes for fascinating studying.

Lastly, I consider the Christmas interval is essential. Frasers printed its half-year report on 5 December, so it’s doubtless that the corporate could have a good suggestion as to how festive buying and selling goes, in comparison with earlier years. That is prone to have influenced its earnings warning, which provides me trigger for concern.

Closing ideas

However regardless of these worries, I do consider the shares supply good worth. And the corporate has a confirmed observe file of development having elevated its income by £1.4bn (40%) throughout its previous 5 monetary years.

Nevertheless, I don’t need to take a place in the mean time.

That’s as a result of I personal shares in JD Sports activities Style, one other FTSE 100 sports activities retailer. The 2 firms are too comparable, which means I’d be closely uncovered to 1 sector, which is rarely a good suggestion.

And for example how carefully aligned they’re, the JD Sports activities share price — since December 2023 — has been the worst performer on the FTSE 100 (Frasers is the third worst).

I’m subsequently going to sit down this one out.