Sharechat Logo

Daily ShareChat: Harvey Norman

By Jenny Ruth

Wednesday 17th February 2010

Text too small?
 Jenny Ruth

Australia-based Harvey Norman, which has 33 New Zealand stores, produced "surprisingly strong" Australian sales growth of 6.8% in its second quarter, particularly since the previous December was boosted by the Australian government's stimulus handouts, says John Kessell, an analyst at Aegis Equities Research.

As well, "the pre-Christmas trading period appears to have been difficult for many retailers due to consumer belt-tightening and early, deep and widespread discounting by competitors to drive sales," Kessell says.

January sales were in line with management expectations and the company is "cautiously optimistic" about the five months ending June. The company reaffirmed previous guidance for first-half profit growth before tax and minorities of more than 40%.

"Despite teething problems, particularly the exposure to poor consumer conditions in Ireland, we believe Harvey Norman can accomplish its overseas expansion strategy," he says. The company also has stores in Singapore, Malaysia and Slovenia.

"High growth in audio-visual and IT products has been the key earnings driver and we expect this division to be a major contributor for the foreseeable future."

Kessell has raised his earnings-per-share forecast for the year ending June by 3%. "We believe Harvey Norman is undervalued and is showing an undemanding price-to-earnings (ratio) relative to forecast earnings-per-share growth."

 

BROKER CALL:  Aegis Equities Research rate Harvey Norman as buy.

 

 



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Wellington International Airport Ltd (“WIA040”) - Maturity
Devon Funds Morning Note - 18 July 2024
CNU - Commerce Commission releases draft Price Quality decision
Precinct FY24 Annual Results and Webcast Details
Scott Technology appoints new CEO
Synlait FY24 guidance withdrawal
Meridian issues demand response exercise notice to NZAS
July 17th Morning Report
CRP - Korella North Environmental Approval Granted
SCL - Sale of Apple Orchards