JBH - Deutsche Bank rates the stock as Buy
BY BROKER NEWS - 09/02/2010
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• JBH - JB HI-FI LIMITED
The broker notes JB Hi-Fi reported a "strong" 1H10 result, one that demonstrated the resilience of the company's business model in what was a challenging retailing environment.
The highlights included comp sales growth of 6.5% and market share gains, with gross margin declines solid given a "highly promotional" 2H10.
The broker also liked the increase in the payout ratio from 50% to 60%, while the FY earnings guidance was broadly in-line with the broker.
Deutsche views the stock as a "defensive discretionary" for 2H10 and beyond, with store openings, store maturation and category growth expected to continue to drive sales and earnings growth. The Buy call and $22.75 price target are maintained. Sector: Retailing.
Target price is $22.75.Current Price is $19.07. Difference: $3.68 - (brackets indicate current price is over target). If JBH meets the Deutsche Bank target it will return approximately 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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