Citi cuts PT on Australia's Michael Hill on disappointing guidance

Michael Hill International

15/07/2022 01:42

** Analysts at Citi cut price target of jewellery retailer
Michael Hill International Ltd  MHJ.AX  on lower earnings and
weaker market multiples 
    ** Co's FY22 sales of A$592.5 million above Citi estimates
following increase in sales in Canada
    ** However, brokerage cut co's FY22 NPAT estimate by -5% to
-7% on lower than expected FY22 EBIT guidance of between A$60
mln and A$63 mln ($40.52 mln-$42.54 mln) 
    ** Sees sales marginally decline by about 1% in FY23 due to
increasing inflation and rates 
    ** Brokerage retains "buy" rating on stock given the co's
strong balance sheet that could support M&A and marketplace
strategy
    ** Two of two analysts rate the stock "buy" or higher; their
median PT is A$1.73- Refinitiv data
    ** MHJ stock down has fallen about 22% this year as of last
close
($1 = 1.4808 Australian dollars)

 (Reporting by Anan Ashraf in Bengaluru)
 ((Anan.Ashraf@thomsonreuters.com;))