Aussie retailer trading conditions to be hit by high interest rates - Citi

Harvey Norman Holdings

07/09/2023 20:21

** Citi says Australian retailer stock prices will fall and
trading conditions could worsen given its forecast of two more
rate hikes by the country's central bank this year   
    ** Expects downside risks for Bunnings, a hardware chain
owned by conglomerate Wesfarmers  WES.AX , due to decline in
margins in some of its quality businesses 
    ** Favourable weather pattern for Bunnings in 2H23 may
reverse next year - brokerage
    ** Expects consumer electronics retailer JB Hi-Fi  JBH.AX 
will benefit from a large spread between consensus cost and
sales growth and a good inventory position
    ** Brokerage cuts Coles  COL.AX  Supermarket EBIT by 7-11%
post its "disappointing" FY23 result
    ** Expects housing recovery to benefit Harvey Norman
 HVN.AX   
    ** Citi retains "buy" ratings on Coles and Harvey Norman;
"sell" rating on Wesfarmers
    ** YTD, COL is down 5.2% and HVN down 2.9%, while WES is up
17% and JBH up 9% this year


 (Reporting by Poonam Behura in Bengaluru)
 ((Poonam.Behura@thomsonreuters.com;))