This retail giant’s shares could be in the buy zone…
The post Top broker tips Harvey Norman (ASX:HVN) share price as a buy appeared first on The Motley Fool Australia. –
The Harvey Norman Holdings Limited (ASX: HVN) share price has been a strong performer over the last 12 months.
Since this time in 2020, the retail giant’s shares have rallied 22% higher.
Can the Harvey Norman share price keep climbing?
The good news is that one leading broker still believes the Harvey Norman share price can go higher from here.
According to a note out of Citi, its analysts have put a buy rating and $6.00 price target on the retailer’s shares.
Based on the current Harvey Norman share price of $5.21, this implies potential upside of 15% over the next 12 months.
And with the broker expecting a very generous dividend yield of 7% in FY 2022, this potential return stretches to 22%.
Citi is forecasting a full year profit of $482 million in FY 2022, with earnings per share coming it at 39 cents. Based on this the Harvey Norman share price is trading at a little over 13x forward earnings.
From these earnings, the broker expects a sizeable 37 cents per share dividend to be paid to shareholders.
What did Citi say?
It commented: “Harvey Norman delivered FY21 underlying PBT (ex-revaluations and pre-AASB16) of $1,034 million, up 67% YoY, ~6% ahead of Citi estimates. Harvey Norman’s underperformance in the July/August trading update is not representative of true underlying demand, in our view, given several distorting factors that skewed the result downward.”
“Key fundamental macro pillars that have underpinned Harvey Norman’s solid FY21 result remain despite lock down disruptions. Given the stock’s relatively undemanding valuation, we maintain our Buy rating with our target price unchanged at $6.00 per share,” it added.
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
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 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.