First-half results were largely in line with expectations. However, Credit Suisse notes comparisons are unfavourable with The Good Guys ((JBH)) and Nick Scali ((NCK)), as Harvey Norman’s Australian franchisee performance weakened in the second quarter relative to the other two.
A greater regional exposure is considered a partial explanation. Offshore results continue to show a strong positive trend but this is of insufficient size to materially influence valuation, in the broker’s view.
Credit Suisse retains a Neutral rating and reduces the target to $4.17 from $4.28.
Sector: Retailing.
Target price is $4.17.Current Price is $3.56. Difference: $0.61 – (brackets indicate current price is over target). If HVN meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).
