Broker sees 42% upside for the Accent (ASX:AX1) share price

Is Accent a bargain buy?
The post Broker sees 42% upside for the Accent (ASX:AX1) share price appeared first on The Motley Fool Australia. –

The Accent Group Ltd (ASX: AX1) share price is under pressure again on Thursday.

In afternoon trade, the footwear retailer’s shares are down 4% to a 52-week low of $1.94.

This means the Accent share price is now down 21% since the start of 2022.

Is the Accent share price a bargain buy?

While the recent weakness in the Accent share price is very disappointing, one leading broker appears to believe that it has created a buying opportunity for investors.

According to a note out of Bell Potter, in response to the company’s recent trading update, its analysts have retained their buy rating but trimmed their price target on its shares to $2.75.

Based on the current Accent share price, this implies potential upside of 42% for investors over the next 12 months. And that doesn’t include dividends. Bell Potter expects a 3% dividend yield from its shares at current levels, stretching the total potential return to 45%.

What did the broker say?

Bell Potter notes that Accent has guided to earnings before interest and tax (EBIT) of $30 million to $31 million during the first half. This fell short of its estimate of $34 million due to a significant slowdown in sales due to the spread of the Omicron variant.

This has unsurprisingly led to the broker making some major revisions to its earnings and dividend estimates for the remainder of the financial year.

Nevertheless, its analysts believe this is a short term headwind and remain positive on its long term outlook. Furthermore, the broker feels the Accent share price is trading at a very attractive level despite its earnings revisions.

It concluded: “Notwithstanding COVID impacts on recent trading, we believe AX1’s core business remains strong with all growth levers intact. Valuation also remains undemanding with FY23/FY24 PE of 14.6x/12.1x. Accordingly, we retain our Buy rating on the stock.”

The post Broker sees 42% upside for the Accent (ASX:AX1) share price appeared first on The Motley Fool Australia.

Should you invest $1,000 in Accent right now?

Before you consider Accent, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Accent wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

The Accent (ASX:AX1) share price is down 17% this year, is it a buy?

Why Accent, BrainChip, Fortescue, and Novonix shares are sinking

Why is the Accent (ASX:AX1) share price backtracking today?

2 high yield ASX dividend shares named as buys

These ASX shares could be buys for value investors

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!