Insights

Harvey Norman (ASX:HVN) share price rises on broker upgrade

This retail giant’s shares could be good value…
The post Harvey Norman (ASX:HVN) share price rises on broker upgrade appeared first on The Motley Fool Australia. –

The Harvey Norman Holdings Limited (ASX: HVN) share price is pushing higher on Wednesday morning.

At the time of writing, the retail giant’s shares are up 1% to $5.02.

Why is the Harvey Norman share price rising?

The catalyst for the rise in the Harvey Norman share price appears to have been a broker note out of Goldman Sachs this morning.

According to the note, the broker has upgraded the company’s shares to a buy rating with an improved price target of $6.00.

Based on the current Harvey Norman share price, this implies potential upside of 19.5% over the next 12 months.

And with Goldman forecasting dividends per share of 36 cents in FY 2022, the potential total return increases to ~27% including dividends.

What did the broker say?

Goldman Sachs made the move on the belief that Harvey Norman is well positioned to capitalise on a stronger outlook for housing related categories such as consumer appliances and furniture.

The broker explained: “We expect the underlying growth outlook into the medium to remain ahead of the pre-pandemic averages for the home related categories. As a result of this, we expect margin execution to remain elevated for longer with EBITDA margin for FY24e expected to be at FY18 levels on a pre-AASB16 basis as the cycle eases. While this still implies FY24 EBIT being A$775mn vs. A$1087.3mn in FY21, the EBIT CAGR over FY19-24e is expected to be at +6.6%, including +7.4% for Australia.”

Goldman believes this growth rate makes the Harvey Norman share price good value based on current multiples.

Its analysts said: “Adjusted for the property valuation, HVN currently trades at a FY22e P/E of 7.1x. This compares to a long-term average of 8.7x and a peer group median of 9.6x. Even on a pre-property adjusted basis, HVN is currently trading at a relative valuation discount of -59% on an Industrials ex financials basis vs. a longer term average of -14% and a 5 year average discount of -42%.”

All in all, Goldman feels this makes Harvey Norman shares worth considering today.

The post Harvey Norman (ASX:HVN) share price rises on broker upgrade appeared first on The Motley Fool Australia.

Should you invest $1,000 in Harvey Norman right now?

Before you consider Harvey Norman, 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 Harvey Norman wasn’t one of them.

The online investing service he’s run for nearly 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 August 16th 2021

More reading

5 things to watch on the ASX 200 on Wednesday

Top broker tips Harvey Norman (ASX:HVN) share price as a buy
Top brokers name 3 ASX shares to buy next week

ASX 200 rises, Harvey Norman falls, Mesoblast sinks

ASX reporting wrap-up: Harvey Norman, Cettire, PointsBet

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 owns shares of and has recommended Harvey Norman Holdings Ltd. 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.

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 App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!