At first glance, the broker notes Premier Investments' FY21 result was in line with guidance, but sales are down -10% in FY22 to date due to lockdowns.
The company has consistently exceeded the broker's expectations over the last 12-18 months, reflecting a strong consumer and solid execution. However, earnings growth in FY22 is increasingly challenging due to lockdowns, lower demand and lower margins.
CEO transition also adds further complexity, the broker notes. Equal-weight retained, target rises to $26.75 from $24.00.
Industry view: In-Line.
Target price is $26.75.Current Price is $28.45. Difference: ($1.70) - (brackets indicate current price is over target). If PMV meets the Morgan Stanley target it will return approximately -6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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