Morgans has concerns about the group’s ability to deliver positive sales momentum for sustained periods in the long term, after FY21 revenue and earnings (EBIT) guidance was well below expectations.
Sales deficits in CBD/large shopping centre stores were the main driver, along with higher supply chain costs, explains the broker. However, it’s thought current headwinds can be resolved/offset reasonably quickly via the underlying cost reduction strategy.
The analyst lowers EPS forecasts for FY21-23 by -25%, -17% and -11%, respectively. The target price falls to $6.80 from $8.91 and the Add rating is maintained.
Sector: Retailing.
Target price is $6.80.Current Price is $5.66. Difference: $1.14 – (brackets indicate current price is over target). If TRS meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
