Ord Minnett takes over research on Vita Group after a transfer from another broker.

Telstra Corp ((TLS)) announced its intention to transition to full ownership of its retail store network, which currently has 104 stores operated by Vita Group, 166 by independent licensees and 67 by Telstra.

Vita Group's 's Master Licence Agreement with Telstra runs until 30 June 2025, but Ord Minnett understand it has provisions for early termination, which include the negotiation of a compensation payment to the company.

The broker estimates a total value of $1.30-1.70 per share while acknowledging significant uncertainty around the stock.

The analyst applies a discount to valuation due to significant uncertainty surrounding the timing and quantum of any payment from
Telstra, the use of those funds by the company and what Vita Group looks like going forward.

Ord Minnett updates the target to $1.11 from $1.49 and changes the rating to Speculative Buy (from Buy).

Sector: Retailing.

Target price is $1.11.Current Price is $0.85. Difference: $0.26 - (brackets indicate current price is over target). If VTG meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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