JB Hi Fi Shares have hit $102, after climbing 7% this month, five years ago they were trading at $24.
Arch rival Harvey Norman shares are sitting at $5.22, up 10.59% during the past month, five years ago they were trading at $2.67.
On the face of it, JB Hi-Fi’s FY24 financial results should not have justified such a big jump, according to analysts who claim that investors are hiking the stock up because they trust the management team and are still investing in the retailer because they believe that JB is still in a strong position to grow following their recent E&S acquisition.
Shortly JB Hi Fi will announce their latest results which will include their first revenues from the Melbourne based E&S who are in a strong position to deliver JB hi Fi a larger share of the B2b construction and renovation market.
The move to expand E&S in Australia is seen as being a threat to both Winnings and Harvey Norman Commercial with the Company tipped to open new stores in both NSW, and Queensland within the next 18 months.
Last year (2024) JB Hi Fi revenues were basically flat year on year at $9.6 billion, but higher costs (particularly from sales and marketing) put increased pressure on the company’s bottom line, ultimately causing net profit to plunge 16.4% to $438.8 million.
Now investors are focused on the E&S green shoots which some observers claiming that the acquisition will more than compensate for the loss of revenue from suppliers such as LG Electronics, Dyson and Sony who are investing in selling direct.
Currently JB Hi Fi is getting their fair share of the replacement appliance market that is currently driving sales while getting a larger share of the premium products market spanning smartphones, appliances, and notebooks, with all operating segments at the big CE retailer performing strongly.
Citi analysts still reckon there is plenty more juice left in the retailer’s tank.
Just last week, the broker reaffirmed its buy rating on the stock and upgraded its price target from $85 to $110. The upgrade helped propel JB Hi-Fi shares up by 7% this last month.
“JB Hi-Fi seems to have defied the odds this year. High interest rates and high inflation should usually sound the death knell for consumer discretionary stocks. But somehow, despite sluggish sales and a hefty drop in overall profits, JB Hi-Fi has managed to come out on top” claims analyst at The Motley Fool.
MPC Markets’ Jonathan Tacadena has a very positive view on JB Hi-Fi shares, but despite this he is recommending a ‘sell’.
“This consumer electronics giant is a top performer,” Tacadena said.
“They continue to generate sales growth and, accordingly, investors have reacted positively to the stock.”
“In our view, the shares are priced to perfection, leaving little or no room for error. The stock is trading at premium valuations compared to its peers,” he said.
