Morgans upgrades JB Hi-Fi to Add from Hold after the recent share-price retreat, the broker noting the company is much cheaper than its historical averages.
It believes this is good news given it does not advise paying a premium for the company given JB Hi-Fi’s limited room for network expansion but that investors now have an opportunity to enter a high-quality, dividend paying, cash generative business.
The company is set to report for the December half on February 14 and Morgans expects a considerably weaker performance given the outstanding performance in the previous year, but believes the risk is to the upside.
Earnings forecasts are unchanged. Target price steady at $54.
Sector: Retailing.
Target price is $54.00.Current Price is $46.10. Difference: $7.90 – (brackets indicate current price is over target). If JBH meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).
