Credit Suisse rates the stock as Upgrade to Outperform from Neutral, believing the market is too bearish regarding expenditure on the household goods sector. A permanent shift to working from home should provide a step change, in the broker’s view.
On the basis of 30% of the Australian workforce working from home two days a week, the broker calculates a 4ppts direct and 3ppts indirect increase in furniture and electrical goods consumption.
As JB Hi-Fi has a near debt-free balance sheet amid surplus franking credits, capital management is considered likely in FY21. Credit Suisse upgrades to Outperform from Neutral and raises the target to $53.02 from $50.62.
Sector: Retailing.
Target price is $53.02.Current Price is $44.02. Difference: $9.00 – (brackets indicate current price is over target). If JBH meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
