Panmure Gordon has initiated its coverage of nursery specialist Mothercare with a buy rating and a 600p price target.

Analyst Jean Roche believes Mothercare’s strong multichannel proposition, international growth opportunity and savings being made from its property review all make it an attractive investment, despite recent weakness in the retailer’s UK like-for-like sales.

Roche said: “We believe Mothercare’s competitive advantage exists in its UK market position, its brand strength which is internationally recognised, and in its fully integrated multichannel model.

“The shares are undervalued in our view, having been oversold year to date as a reaction to weaker UK like-for-like sales trends.”

Last month Mothercare reported that UK like-for-like sales dropped 4.1% in the 12 weeks to July 10. Chief executive Ben Gordon blamed strong comparatives from last year and the cannibalisation of some store sales where larger out-of-town shops had opened.

Panmure also highlighted that Mothercare’s social media site is also a growth area because it is about to break even.