Leading broker tips Super Retail (ASX:SUL) share price to rocket higher

The Super Retail Group Ltd (ASX:SUL) share price has been tipped to climb significantly higher from here by one leading broker…
The post Leading broker tips Super Retail (ASX:SUL) share price to rocket higher appeared first on The Motley Fool Australia. –

The Super Retail Group Ltd (ASX: SUL) share price has been a strong performer over the last six months.

During this period, the retail conglomerate’s shares have charged an impressive 42% higher.

Can the Super Retail share price go even higher?

If you missed out on the stellar gains made by the Super Retail share price over the last six months, don’t worry. This is because one leading broker believes they can go a lot higher from here.

In response to its impressive trading update earlier this week, Goldman Sachs has reiterated its buy rating and lifted the price target on Super Retail’s shares to $14.80.

Based on the current Super Retail share price, this price target implies potential upside of 29% for its shares over the next 12 months. This potential return increases to almost 36% when you include the generous dividends the broker is expecting the company to pay.

Goldman Sachs has forecast a fully franked dividend of 78 cents per share in FY 2021. This equates to a 6.8% dividend yield at present.

Why is Goldman Sachs bullish on Super Retail?

The broker believes Super Retail is perfectly positioned to benefit from the current trading environment. It explained:

“SUL has continued to position itself extremely well to capture the unique trading environment we have seen over much of 2020, and in particular has made the most of the reopening of the Australian economy as households have increasingly shifted to outdoor activities and road travel over the summer period.”

“As we have noted before, while much of the consumer spending patterns seen over 2020 are unlikely to be sustained, we expect the international travel restrictions associated with the pandemic to provide a medium-term tailwind to SUL. Furthermore, the weakness experienced by SUL during the post bushfire period in 2H20 is likely to provide an easy base to cycle.”

In respect to its expectation for a big dividend this year, the broker commented:

“We forecast strong cash generation conditions to continue through 1H21, bringing forecast net cash to A$119mn in 1H21 and A$171mn in FY21. We forecast a recovery in dividend payout ratio to ~60% over FY21, translating to a forecast FY21 dividend of A$0.78 per share, implying a 6.7% [at the time] fully franked dividend before contemplating capital management.”

All in all, this appears to make the Super Retail share price one to watch in 2021.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Leading broker tips Super Retail (ASX:SUL) share price to rocket higher appeared first on The Motley Fool Australia.

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!