Retailer Harvey Norman to be hit by rising rates, inflation - Jefferies

Harvey Norman Holdings

31/08/2022 23:40

** Brokerage Jefferies expects Australia's Harvey Norman
Holdings Ltd  HVN.AX  to be hurt by rising rates and cost of
living, which is dampening demand and increasing inventory risks
for the retailer
    ** Jefferies cuts PT on company's shares to A$4.30 from
A$4.40
    ** Brokerage says Harvey Norman stock cheaper than peers JB
Hi-Fi  JBH.AX  and Super Retail  SUL.AX , adding that valuation
discount is "even larger", considering HVN's involvement in
property
    ** Jefferies says Harvey Norman's cash realisation was weak
for the second year at 66%, mainly due to inventory build up
    ** In contrast, Citi analysts say HVN's near-term outlook
remains positive, given how well placed households are in
Australia
    ** 5 of 12 analysts rate the stock "buy" or higher, 6 "hold"
and 1 "sell"; median PT A$4.44 – Refinitiv
    ** Company's shares down 14.4% this year, as of last close

 (Reporting by Roushni Nair in Bengaluru)
 ((Roushni.Nair@thomsonreuters.com))