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On Thursday, Citi analysts adjusted their outlook on Super Retail Group Ltd. (SUL:AU), revising the stock’s price target downward to AUD18.00 from the previous AUD19.00, while still endorsing the stock with a Buy rating. The revision follows Super Retail’s release of their first half of the fiscal year 2025 (1H25) results.
The analysts noted that despite the less than stellar performance in 1H25, they found reasons for optimism in the recent trading update from Super Retail. They highlighted an improving consumer environment and suggested that the margin pressures the company faced are likely to be temporary. Although the weak currency presents potential challenges, Super Retail has a history of effectively navigating such risks.
Citi also pointed out that Super Retail’s balance sheet appears robust enough to potentially allow for special dividends in the upcoming two years. As a result of these factors, the analysts have made a slight downward revision in their earnings before interest and taxes (EBIT) forecasts, with a 3.5% reduction for the fiscal year 2025 estimates and approximately 1-2% for the fiscal years 2026 and 2027.
The report concluded with the analysts reiterating their confidence in Super Retail by maintaining a Buy rating, despite the adjusted price target. This suggests that they continue to see value in the company’s stock for potential investors.
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