JBH – Credit Suisse rates the stock as Outperform

Credit Suisse rates the stock as Upgrade to Outperform from Neutral, believing the market is too bearish regarding expenditure on the household goods sector. A permanent shift to working from home should provide a step change, in the broker’s view.

On the basis of 30% of the Australian workforce working from home two days a week, the broker calculates a 4ppts direct and 3ppts indirect increase in furniture and electrical goods consumption.

As JB Hi-Fi has a near debt-free balance sheet amid surplus franking credits, capital management is considered likely in FY21. Credit Suisse upgrades to Outperform from Neutral and raises the target to $53.02 from $50.62.

Sector: Retailing.

Target price is $53.02.Current Price is $44.02. Difference: $9.00 – (brackets indicate current price is over target). If JBH meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).



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