Following 1H results for Metcash, Citi assesses a step-change for earnings in Hardware. The broker upgrades FY22-24 earnings (EBIT) forecasts by 9%, 8% and 4%, respectively, and lifts its target price to to $4.40 from $4.20.
Total Tools provided the largest boost within Hardware as sales pruductivity lifted, explains the analyst.
Management disclosed sales growth in the first five weeks of the 2H was 2.3% for Food, 20.1% in Hardware and 7.6% in Liquor. The analyst maintains a Neutral rating and expects an eventual normalisation of trading.
Sector: Food & Staples Retailing.
Target price is $4.40.Current Price is $4.24. Difference: $0.16 – (brackets indicate current price is over target). If MTS meets the Citi target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).