First half operating earnings were in line with guidance. Morgan Stanley notes strong momentum has continued and envisages upside to expectations for FY21.

No earnings guidance was provided while like-for-like sales have accelerated to growth of 10.7% in the first eight weeks of the second half.

Morgan Stanley expects demand in the short term will continue but positive growth in earnings per share in FY22 will be challenging to achieve. Equal-weight retained. Target is $2.60. Industry view is In-Line.

Sector: Retailing.

Target price is $2.60.Current Price is $2.26. Difference: $0.34 - (brackets indicate current price is over target). If AX1 meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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