Key points
- JB Hi-Fi shares push higher following broker upgrade.
- Morgans believes the retailer’s shares are a buy after recent weakness
- Its analysts predict significant upside and generous yields in 2022
The JB Hi-Fi Limited (ASX: JBH) share price has started the week in fine form.
At the time of writing, the retail giant’s shares are up 2.5% to $46.22.
Why is the JB Hi-Fi share price pushing higher?
The catalyst for the rise in the JB Hi-Fi share price on Monday appears to have been the release of a bullish broker note out of Morgans this morning.
According to the note, the broker has upgraded the retailer’s shares to an add rating and held firm with its price target of $54.00.
Based on the current JB Hi-Fi share price, this implies potential upside of 17% over the next 12 months. And that’s before dividends. If you include the $2.17 per share fully franked dividend the broker is forecasting in FY 2022, this stretches the potential return to over 21%.
What did the broker say?
Morgans made the move largely on valuation grounds following a sharp pullback in the JB Hi-Fi share price in recent months. It feels this has brought its shares down to an attractive level which is below historic multiples.
Based on Morgans’ estimate for earnings per share of $3.33 in FY 2022, the company’s shares are changing hands for under 14x forward earnings. The broker also notes the generous forecast yield (4.7%) on offer at current levels.
And while its analysts aren’t expecting JB Hi-Fi’s half year results next month to be as strong as the prior corresponding period, they do see upside risk to forecasts.
All in all, the broker believes the sum of the above makes JB Hi-Fi’s shares a great option for investors in the retail sector right now.
The post JB Hi-Fi (ASX:JBH) share price pushes higher after broker upgrade appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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