KGN – Credit Suisse rates the stock as Neutral

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The company sustained another strong month of sales and earnings growth in May. This stems from consumers switching to online and increased marketing expenditure.

Credit Suisse expects June will also be strong, given this is a typically higher month of sales because of tax incentives at the end of the financial year.

While not “overly enthusiastic” about discretionary retail exposure during the early stages of a recession, the broker acknowledges the company is clearly benefiting from an acceleration in online shopping.

Neutral rating maintained. Target rises to $11.82 from $8.36.

Sector: Retailing.

Target price is $11.82.Current Price is $12.38. Difference: ($0.56) – (brackets indicate current price is over target). If KGN meets the Credit Suisse target it will return approximately -5% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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