Citi cuts earnings estimates, PT for Michael Hill after trading update

Michael Hill International

22/01/2023 21:53

** Citi trims price target for Australia's Michael Hill
International  MHJ.AX  by 4% to A$1.58, retains "Buy" rating
    ** Cuts the jewellery retailer's FY23-25 NPAT estimates by
10-18% to reflect the softer-than-expected 1H FY23 EBIT guidance
and slower-than-expected sales
    ** Forecasts 2H FY23 total sales growth of 2% as brokerage
anticipates increasing pressures on the consumer combined with
not having the luxury of cycling lockdowns
    ** It will be interesting to see whether the company can
maintain prices in an environment where the consumer may weaken
and input cost pressures ease - Citi
    ** Adds reduction in discounting through brand elevation
appears to have helped maintain gross margins inline with pcp 
    ** Two of three analysts rate the stock "buy" or higher, one
"hold" and none "sell" or lower; their median PT is A$1.65 –
Refinitiv data
    ** Stock fell 20.3% in 2022
 (Reporting by Echha Jain in Bengaluru; editing by Diane Craft)
 ((Echha.jain@thomsonreuters.com))