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Investing.com - UBS has upgraded JB Hi-Fi Ltd (ASX:JBH) from Sell to Neutral while raising its price target to AUD112.00 from AUD109.00.
The upgrade follows what UBS describes as a "significant P/E multiple re-rating" for JB Hi-Fi that has pushed its valuation beyond traditional peers Harvey Norman and Super Retail Group.
UBS has developed a new framework for evaluating high-multiple retailers, focusing on rising total addressable market, market share gains, robust cost management, and prudent capital management—areas where JB Hi-Fi scores well.
The investment bank now suggests JB Hi-Fi should increasingly be compared to Wesfarmers’ retail divisions Bunnings and Kmart rather than just its traditional competitors.
UBS notes that while Wesfarmers’ FY26E P/E ratio (34.9x) remains above JB Hi-Fi’s (23.3x), JB Hi-Fi’s current valuation appears "increasingly justified," with the analyst concluding that "following today’s share price decline, the risk reward is more balanced."
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