Australia's Michael Hill falls as Citi downgrades to 'neutral', cuts PT

Michael Hill International

20/05/2024 03:45

** Shares of Australia's Michael Hill International  MHJ.AX 
fall as much as 21% to A$0.49, their biggest intraday drop since
March 2020
    ** Analysts at Citi downgrade the retailer to "neutral" from
"buy" after weaker-than-expected trading update
    ** Cuts price target to A$0.66 from A$0.92
    ** Citi lowers FY24 to FY26 earnings estimates on the firm,
reflecting a broadly similar sales outcome to the third quarter
    ** Ongoing gross margin weakness also raises questions
around the effectiveness and sustainability of the brand
elevation strategy - Citi
    ** Brokerage says update reveals consumer discretionary
spend in Australia is under pressure, with the core Michael Hill
brand continuing to see declining sales
    ** Stock has fallen 31.5% this year, as of last close

    

 (Reporting by Rishav Chatterjee in Bengaluru)
 ((Rishav.Chatterjee@thomsonreuters.com;))