Share of the week: Well-heeled Jimmy Choo

Jimmy Choo sold almost £300 million of expensive shoes, handbags and accessories last year. That was up 6%, or 12% if you strip out currency fluctuations. Like-for-like sales, meanwhile, rose 5.7%. However, hefty finance costs and IPO fees following October's float meant the luxury brand lost over £8 million in 2014.

Investor appetite for the shares has been limited, too. Listed at 140p, they have been as high as 183p, but volume has been low and 160-180p has been the range for much of the past nine months. But a recent initiation note from Barclays has injected some life into proceedings, propelling the shares up by nearly 7%, close to a four-week high.

Over 49 pages, Barclays argues that Choo is growing significantly faster than the sector, yet trades in line with the sector multiple of 18.1 times earnings per share (EPS) estimates for 2016.

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"We see the Jimmy Choo brand as well positioned with a sub-3% market share in footwear, one of the fastest growing and most fragmented luxury segments with substantial white space," writes the broker. "Recent infrastructure spend supports scalability and should generate operational gearing."

Look for 14% five-year EPS compound annual growth rate (CAGR), it says, driven by its store opening programme, 4-5% like-for-like growth and improvement in cash profit margin from 16.8% to 20.8% by 2020.

Given this enthusiasm for the shares, Barclays rates Choo 'overweight' with a 208p price target, implying 22% upside current levels.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.