Metcash has signalled an improvement in trading the first 16 weeks of the first half of market share gains as well. UBS notes this is been driven by a shift to shopping in the neighbourhood, consuming food and liquor at home, and less overseas travel.
Going forward, therefore, some of the industry support looks set to ease yet the broker is confident some consumers would have changed habits permanently.
In hardware, Metcash is also growing faster than Bunnings ((WES)), the broker adds. Buy rating and $4.60 target unchanged.
Sector: Food & Staples Retailing.
Target price is $4.60.Current Price is $3.98. Difference: $0.62 – (brackets indicate current price is over target). If MTS meets the UBS target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
