Hotel Chocolat on course for 300p target

Being something of a chocoholic, and being one of the few people actually prepared to pay £3.85 for a 65% Supermilk bar, the short history of Hotel Chocolat has been a source of much personal interest.

Hotel Chocolat (HOTC): Break Towards Implied 300p Technical Target

It would appear that the rating upon which Hotel Chocolat shares currently have is about as rich as you have to be to afford to consume the posh confection the newly floated company sells. This is said on the basis that the present valuation of the firm stands at £250m. The other issue is that with revenues (not profits) standing at £92.6m, there is plenty of hope value in the shares even at current levels. Of course, the high rating has enabled the company to continue the store roll- out which occurred ahead of the IPO in May. Clearly, as in the case of many a niche concept, we have seen the doubters and cynics hit this company hard. This was not helped of course by an element of cashing out by the founders at the time of the IPO, to the tune of them making £20m out of the event. I would venture to suggest that some of the negativity associated with the company has been related to this factor.

Chart wise we are looking at a situation where there has been a vertical move out of the post May consolidation. Above the initial May resistance at 225p on an end of day close basis, one would be looking to a top of 2016 price channel target as high as 300p over the next month. Only back below the initial September resistance at 211p would really even begin to delay the upside scenario.