The company posted a strong trading update, as automotive like-for-like sales growth accelerated to 7.5% in the five weeks to March 21. Stores have been closed in New Zealand for a minimum of four weeks.
Morgan Stanley estimates Super Retail has around $490m in available liquidity which represents a six-months buffer, assuming zero revenue and no reduction the cost base.
The broker remains comfortable with the liquidity and believes the stock is oversold.
Overweight rating maintained. Target is $10.50. Industry View: Cautious.
Target price is $10.50.Current Price is $4.28. Difference: $6.22 – (brackets indicate current price is over target). If SUL meets the Morgan Stanley target it will return approximately 59% (excluding dividends, fees and charges – negative figures indicate an expected loss).