Credit Suisse considers it likely investors will look through the fire-related impact on stores in the first half. Nevertheless, more frequent and extreme events have the potential to affect retailer performance.
The stock is not priced for growth and the broker suggests there is little downside risk while Supercheap Auto and Rebel Sport continue to perform well.
Estimates are downgraded to reflect the first half guidance and expectations of a poor third quarter. Neutral rating maintained. Target is reduced to $9.46 from $9.50.
Target price is $9.46.Current Price is $9.76. Difference: ($0.30) – (brackets indicate current price is over target). If SUL meets the Credit Suisse target it will return approximately -3% (excluding dividends, fees and charges – negative figures indicate an expected loss).