After a tour of the Malaysian and Singaporean operations, UBS is more positive, increasingly confident in both store targets and margin upside. The broker lifts estimates for earnings per share by 1-2% for the group and Asian operating earnings forecasts (EBITDA) by 1-9%.
The broker believes Harvey Norman is a more agile business than the market appreciates offshore, but the franchise model in Australia and exposure to housing remain of concern. Neutral rating maintained. Target rises to $3.40 from $3.25.
Target price is $3.40.Current Price is $3.72. Difference: ($0.32) – (brackets indicate current price is over target). If HVN meets the UBS target it will return approximately -9% (excluding dividends, fees and charges – negative figures indicate an expected loss).