Jefferies sees softening consumer demand to hit Aussie discretionary retailers

Harvey Norman Holdings

03/03/2023 24:59

** Jefferies expects Aussie discretionary retailers to be
pressured from softer consumer demand as higher interest rates
bite
    ** Says elevated refining margins, capacity constraints and
global demand recovery will support fuel refiners Ampol  ALD.AX 
and Viva Energy  VEA.AX 
    ** Broker remains cautious on Super Retail Group  SUL.AX ,
JB Hi-Fi  JBH.AX  and electronics retailer Harvey Norman
 HVN.AX  due to their exposure to bulky goods
    ** Sees signs of weakness in sale of big ticket items in the
companies' January trading updates but SUL stood out with a
strong January sales
    ** We prefer names not exposed to discretionary consumer
spend - Jefferies
    ** Expects there is scope for further margin expansion at
staple stocks Woolworths Ltd  WOW.AX , Coles Ltd  COL.AX  and
Endeavour Ltd  EDV.AX  as supply chain disruptions ease
    ** ALD, SUL and VEA were the best performers, while Domino's
Pizza Enterprises  DMP.AX , HVN and JBH were the worst
performers, according to Jefferies

     ($1 = 1.4663 Australian dollars)

 (Reporting by Savyata Mishra in Bengaluru)
 ((Savyata.Mishra@thomsonreuters.com))