Citi: Expects Warehouse Group's FY21 earnings to peak despite slowdown in H2 sales growth, raises PT

Warehouse

30/03/2021 02:36

** Citi brokerage retains "buy" rating on Warehouse Group
 WHS.NZ  and increases target price to NZ$4.40 on higher
earnings
    ** Brokerage expects continued margin benefits from
restructuring while a zero-debt position provides support to
valuation
    ** Current PT represents an upside of 17.02% to stock's last
close on March 29
    ** Citi says retailer's sales for half year were
weaker-than-expected and expects some slowdown in overall sales
growth in 2H21
    ** Also forecasts EBIT margins of 7.8% in FY21 and 5.5% in
FY22 and notes that with rebounding sales and margins of group,
FY21 may be a peak in earnings 
    ** WHS last Thursday reported a jump in HY sales by 7.4% to
NZ$1,808.3 mln ($1.27 bln), adjusted NPAT grew 140.2% to NZ$111
mln  urn:newsml:reuters.com:*:nFWN2LM0UV
    ** Two of four analysts rate the stock "buy" or higher and
two  rate "hold"; their median PT is NZ$3.80 – Refinitiv data
    ** Stock up 38.9% this year, as of last close

    ($1 = 1.4278 New Zealand dollars)

 (Reporting by Savyata Mishra in Bengaluru)
 ((Savyata.mishra@thomsonreuters.com))