Citi slashes PT on Harvey Norman as high interest rates worsen outlook

Harvey Norman Holdings

28/06/2023 04:56

** Analysts at Citigroup cut price target on Australian
electronics retailer Harvey Norman Holdings  HVN.AX  to A$3.70
from A$4.10, retains "neutral" rating
    ** Brokerage expects market conditions to worsen as more
loans roll over to variable interest rates and as interest rate
continue to go up
    ** HVN expects FY23 PBT excluding AASB16 leases and net
property revaluations in a +/- 5% range of A$670 mln ($445.01
mln), significantly below A$942.8 mln logged last year
    ** Brokerage cuts FY23 EBIT (excluding revaluations)
forecast by ~6%, and FY24 EBIT view by 8% on high interest rate
view
    ** Believes beyond current market conditions, recent rebound
in house prices and strong rise in house price expectations is
bullish for HVN
    ** As at 0315 GMT, HVN shares up 4.2% at A$3.39, biggest
intraday gain since June 20 last year
    ** Two of 13 analysts rate the stock "buy" or higher, five
"hold" and six "sell" or lower; their median PT is A$3.60 –
Refinitiv data

($1 = 1.5056 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))