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Highlights
- Uncertain Growth for Peter Alexander: Citi raises concerns over growth and rising costs for Premier Investments' sleepwear brand, Peter Alexander, particularly post-1H25.
- Earnings Forecasts Cut: Citi slashes PMV’s FY25 core net profit estimate by 15.7% to AU$196.8 million, and FY26 by 26% to AU$182.8 million, down from AU$257.9 million in FY24.
- Stock Performance & Analyst Ratings: Citi raises its price target to AU$26.00 from AU$22.74 but maintains a "neutral" rating; PMV has declined 2% this year.
Citi has warned of heightened risks for Australian retail billionaire Solomon Lew’s Premier Investments (ASX:PMV) following its apparel brand demerger with Myer Holdings (ASX:MYR). In a major restructuring move last month, PMV transferred its apparel brands to Myer in exchange for a stake in the 125-year-old retailer, leaving it with two core brands—sleepwear designer Peter Alexander (PA) and school supplies brand Smiggle.
Growth Concerns & Cost Pressures
While Peter Alexander has been a key revenue driver, Citi sees growing risks for its expansion and warns of a potential cost blowout post-1H25. This uncertainty has led the brokerage to cut its earnings forecasts, reducing its FY25 core net profit estimate by 15.7% to AU$196.8 million and FY26 by 26% to AU$182.8 million, a sharp decline from FY24’s AU$257.9 million earnings.
Stock Outlook & Analyst Views
Despite concerns, Citi raised its price target for PMV to AU$26.00 from AU$22.74 while keeping a "neutral" rating. As of Friday’s close, PMV was trading at AU$23.88, down 2% year-to-date.
Among analysts covering the stock, five out of 12 rate PMV a "buy" or higher, while seven recommend holding. The median price target stands at AU$29.98, according to LSEG data.
