2020 Savings Will Result In 2021 Home Retail Boom: Citi
The outlook for retail is rosy as income growth recovers, people are saving most robustly, and international borders remain closed, according to a consumer insights report from Citi.
A 3.4 per cent in wage growth has translated into 5.7 per cent disposable income growth.
An average of 15,000 per household in incremental savings built up during 2020 will see Australian retail sales growth of between 2-3 per cent, with housing-related retailers seeing an even better 2021.
Nick Scali, Harvey Norman, and Beacon Lighting have all predicted rises in stock prices in 2021.
Beacon have set a 12-month target price of $2.21 per share (currently $1.95), while Nick Scali are predicting a bump from current levels of $11.29 to $12.05.
Harvey Norman are similarly optimistic, setting a 12-month target price of $6.00 per share. They currently sit at $5.21.
Interestingly, Harvey Norman highlight the potential risks of a “severe correction” in the Australian housing market, which would hurt its sales. It also points out “new competitors are opening stores rapidly and attempting to take share from HVN. Many of these competitors are high-volume, low-margin retailers such as Amazon.”
Beacon Lighting pinpoint a potential risk to its operation as “loss of sales due to technological advances, online players and/or lack of innovation.”
Nick Scali is relying on a well-paced rollout of new stores in hitting its targets, if this is done too slowly or too quickly, it will impact share prices.