Citi, Morningstar flag challenging second half for Harvey Norman

Harvey Norman Holdings

28/02/2023 19:38

** Analysts at Citi and Morningstar flag a challenging
second half of 2023 for Australia's biggest electronics
retailer, Harvey Norman Holdings Ltd  HVN.AX , on the back of
declining sales in key markets and inventory concerns 
    ** Citi cuts PT for HVN to A$4.10 from A$4.80; maintains
"neutral" rating 
    ** Morningstar gives a fair value estimate of A$3.90 for HVN
with an uncertainty rating of "medium" 
    ** HVN posted a 15% drop in its first-half profit as the
cost-of-living pressures crimped discretionary retail spending
    ** Citi says first-half 2023 result was materially below
trading updates from competitors JB Hi-Fi and The Good Guys
implying market share losses for HVN 
    ** Citi says co's inventory overhang is the key concern
going into second half of 2023, placing margins at risk 
    ** Citi forecast a sales decline of 10% for 2H23 in the
Australian franchise segment of HVN 
    ** Analysts at Morningstar say deceleration in sales
momentum for co in Australia and New Zealand markets in January
points to a softer second half for the group 
    ** Morningstar lowers their fiscal 2023 earnings estimates
by 10% to A$0.40 for HVN
    ** Two of 13 analysts rate the stock "buy" or higher, six
"hold" and five "sell" or lower; their median PT is A$4.20-
Refinitiv data
    ** Shares of co are down 6.8% this year as of last close

 (Reporting by John Biju in Bengaluru)
 ((John.Biju@thomsonreuters.com;))