Macquarie Downgrades Harvey Norman's (ASX:HVN) Price Target Amid Economic Concerns and New Zealand Weakness

September 02, 2024 01:05 PM AEST | By Team Kalkine Media

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Macquarie Downgrades Harvey Norman's (ASX:HVN) Price Target Amid Economic Concerns and New Zealand Weakness — Image source: shutterstock

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Shares of Harvey Norman (ASX:HVN) in Australia fell by 1.1% to AU$4.53 on early trading hours of Monday, marking their lowest level since August 9. Macquarie analysts have adjusted their price target for the furniture and electronics retailer, reducing it from AU$5.40 to AU$5. Despite this downgrade, they have maintained an "outperform" rating. The revision in the price target comes alongside a decrease in earnings forecasts for the next three financial years, with reductions of 6.3%, 3.8%, and 5.8% respectively.

The brokerage highlights that Harvey Norman's operations in New Zealand continue to struggle, compounded by a broader economic slowdown impacting trading. They also observed an increase in bonus gift cards during FY24, attributed to heightened promotional activities. Despite these challenges, Macquarie's outlook for FY25 remains optimistic, supported by anticipated tax cuts in Australia and potential rate reductions later in the year.

So far this year, Harvey Norman's stock has experienced a 9.1% rise as of the last close, reflecting some resilience amid broader market conditions.

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