PREMIER RETAIL LIKELY TO SHINE AS ECONOMY RECOVERS
SHARES in retail giant Premier Investments continued to rally on Friday as analysts said it was well placed to excel when Covid-19 restrictions are lifted.
The retailer, which owns brands such as Smiggle, Portmans and Peter Alexander, reported on Thursday that net profit almost doubled to $271.8m last financial year. This prompted a number of analysts to ratchet up their price targets for the stock to well above $30.
Premier shares jumped 3.1 per cent on Thursday and shot up a further 5.5 per cent to $29.15 on Friday, making it one of the best performers on the
ASX 200. “Premier Investments is well placed to benefit from the postlockdown reopening,” JP Morgan analyst Bryan Raymond said. “Management has navigated the challenges of the pandemic very well, extracting sustainable rent reductions, building their online business to around 20 per cent of sales and resetting promotions through confident buying.”
JP Morgan has maintained its “overweight” rating on PremierInvestments with a 12 month price target of $32, up from a prior target of $27 per share. He upgraded his earnings guidance for the company’s retail arm, Premier Retail, by 23 per cent in fiscal 2022 and 19 per cent in 2023.
Citi analyst James Wang said Premier’s Christmas trading is likely to be strong given pent-up demand.
Citi has maintain a “neutral” rating and increased its target price to $30.70, up from $27.40. “Premier Investments remains very well positioned to navigate the current uncertainty given its online capability and strong inventory position and net cash balance,” Mr Wang said.
The ASX 200 closed down 0.4 per cent at 7342.6 points on Friday, bringing its fall over the week to 0.8 per cent.
The best performer on the ASX 200 on Friday was Computershare which rallied 5.7 per cent to $17.90.