Australia's Metcash exposed to consumers trading down to lower-price competitors - Morningstar

Metcash

18/09/2023 24:47

** Australian retailer Metcash's  MTS.AX  business model is
exposed to consumers trading down to lower-price competitors
-analysts at Morningstar 
    ** Brokerage says structural decline in smoking cigarettes
and illicit trade weighing on co's grocery business more than at
retail giants Woolworths  WOW.AX  and Coles  COL.AX  
    ** Morningstar estimates co's hardware segment growing
broadly in line with key competitor Bunnings 
    ** Brokerage reduces fiscal 2024 sales estimate for group by
4% to A$16 bln ($10.29 bln); maintains A$4 fair value estimate
    ** Morningstar downgrades fiscal 2024 EPS forecast by 5% and
liquor sales growth estimate to 3% from 4%
    ** Five of 11 analysts rate the stock "buy" or higher, four
"hold" and 2 "sell"; their median PT is A$4.0 - LSEG data
    ** MTS down 7.0% YTD, as of last close 
    
($1 = 1.5542 Australian dollars)

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