AX1 – Morgans rates the stock as Hold

Morgans now expects store rollout velocity to remain elevated as new concepts and favourable rental agreements take hold. It’s felt the group’s scale and covid impacts in general, position the company well to secure more attractive rental deals.

The analyst lifts EPS forecasts by 2.4% in FY21 and around 6% in FY22 and FY23, largely due to higher store rollout assumptions and gross margins (FX tailwinds). The target price is increased to $2.85 from 2.55 and the Hold rating is unchanged.

The broker estimates an around -$6m sales and -$3m earnings (EBIT) impact from the two week Victorian lockdown.

Sector: Retailing.


Target price is $2.85.Current Price is $2.73. Difference: $0.12 – (brackets indicate current price is over target). If AX1 meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).



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