Myer Holdings Limited: A Good Buy or A Good Bye?

Myer Holdings Limited (ASX:MYR) witnessed a positive momentum in September 2018. The primary reasons for the strong performance in the company’s shares could be the company’s unexpected results coupled with the new strategy adopted by the company’s top management. However, the analysts are still confused on the company’s outlook. After the company reported the results, its stock started heading northwards primarily on the back of the investors’ interests. It seemed that some investors are still positive on the stock’s outlook. The investors’ have confidence in the new CEO’s (chief executive officer) turnaround strategy.

The shares of Myer were ranked 8^th when considered the short selling done on various stocks. The primary reason for this is that market participants are of the view that the company would be witnessing hurdles in the long-term growth on the back of the lease liabilities which amounts to $2.7 billion. However, when the chief executive of the company came up with its turnaround strategy, the market participants started believing in the long-term potential of the stock.

However, it seems like the analysts still don’t have confidence. Some of the analysts have given the stock a “neutral” rating which is the best rating according to them. It could be considered the stock managed neutral rating primarily because of the turnaround strategy. Of the ten analysts covering the stock, 50% have suggested “wait and see” while the remaining half (50%) are suggesting to avoid the stock. [optin-monster-shortcode id="wxhmli4jjedneglg1trq"]

In the prior year, of the eleven analysts covering the stock, buy rating was given by two analysts, sell was given by four analysts while hold rating was suggested by five analysts. On the bright side, the stock’s rating got improved when the company reported results from JPM Morgan (NYSE:JPM). Earlier the rating was “underweight” and after it got upgraded to “neutral.” In addition, JPMorgan also raised the target price on the stock. It was increased from 37? to 43?. The broker has positive view on the chief executive’s new strategy. Moreover, it added that risk-reward ratio is heading in the favorable direction.

According to the analysts, the new strategy might prove beneficial for the company in terms of its profits amid the downward momentum in the company’s sales figure. UBS also has the favorable outlook on the company’s expected performance as the firm improved its rating. Earlier it has given sell which has been changed to neutral after the company posted yearly results. According to UBS, the company posted weaker results however, they were as per the expectations.

The positive recommendations of UBS came on the back of the positive momentum in the QoQ sales, gross margins. However, the loan covenants also saw some relaxation. The key highlights of the new chief executive’s strategy involves clearance floors’ closing, lower discounts, an improvement with respect to the customer service, keeping exclusive brands as well as strategy to reduce the number of stores.

Who all are suggesting good bye?

The underperform rating allotted by the Credit Suisse reflects that the company has a bearish outlook on Myer. According to Credit Suisse, exclusive brand strategy has not been able to achieve the targeted customer satisfaction. Another firm, Citi, maintained a “sell” rating on the stock. According to them, risk-reward doesn’t seem to be favorable and Myer also has strategy concerns.

Dividend Stocks To Buy

The Income available from dividends remains attractive for many investors.

We take a look at the best yields on the market and assess what they say about a company’s prospect.

One Thing is certain, though, Australia interest rates are still low, making income difficult to come by and keeping the focus for many investors on high yielding stocks. Kalkine’s team of analysts bought you handpicked report for “Top 25 Dividend Stocks For 2018.”

ASX-relevant Special Reports are published year-round to provide a detailed analysis into an investing opportunity or a potential risk to your portfolio.

Click here to get your free report.

Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.