Is the JB Hi-Fi Limited (ASX:JBH) share price in the buy zone ahead of its half year results release later this month?
The post What to expect from the JB Hi-Fi (ASX:JBH) half year result appeared first on The Motley Fool Australia. –
With earnings season now underway, I have been looking at what is expected from some of Australia’s most popular companies.
On this occasion, I’m going to take a look a retail giant JB Hi-Fi Limited (ASX: JBH).
What is expected from the JB Hi-Fi half year result?
A strong first half result is expected from JB Hi-Fi on 15 February. And while much of its financials have been pre-released in January, there’s still plenty to be keeping an eye on.
In case you missed it, last month JB Hi-Fi revealed that it had a very strong half thanks to continued elevated customer demand for consumer electronics and home appliance products.
As a result, it expects to report a 23.7% increase in sales to $4,941.2 million and a whopping 86.2% lift in net profit after tax to $317.7 million for the half.
What else should you look for?
According to a note out of Goldman Sachs, it has suggested that investors watch out for a number of key factors.
These include cash flow, drivers of performance across operating leverage, its gross margins, and a trading update for January.
Goldman is expecting the retailer to report an operating cash flow of $224.9 million, capital expenditure of $28.5 million, and a net cash position of $257.8 million.
From this, it is forecasting the company to declare a fully franked interim dividend of 178 cents per share, which is up 79.8% on the prior corresponding period.
Looking ahead, Goldman commented: “While we expect trends into January to have remained strong, even if moderating, any trading updates or outlook updates will be key indicators to understand the earnings trends into 2H21 and beyond.”
Is the JB Hi-Fi share price in the buy zone?
Goldman Sachs believes the JB Hi-Fi share price is fully valued now and has put a neutral rating and $51.60 price target on its shares.
It prefers Super Retail Group Ltd (ASX: SUL) and has a buy rating and $14.80 price target on its shares.
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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.