What’s on the horizon for the Adairs share price in June?

A woman stands on a huge oversized wooden park bench with her arms outstretched towards the mountainous horizon in the distance.A woman stands on a huge oversized wooden park bench with her arms outstretched towards the mountainous horizon in the distance.

The Adairs Ltd (ASX: ADH) share price has been through a lot of volatility in 2022.

It has mostly been negative for Adairs shares. In fact, the Adairs share price has fallen around 45% this year.

FY22 has been challenging for the business. The first half was affected by COVID-19 impacts, including store closures, which wiped millions off the expected earnings before interest and tax (EBIT).

But after the difficult decline, is the Adairs share price an opportunity?

Broker ratings on the Adairs share price

Let’s look at what brokers think of the business. A price target is where an analyst thinks that the share price will be in 12 months from the time of the rating.

The Adairs share price is rated as a buy by the broker Morgans with a price target of $3.50. That implies a possible rise of more than 50%.

UBS rates Adairs as a buy, with a price target of $5.20. That suggests a potential rise of around 130%.

While Ord Minnett only rates Adairs as a hold, the price target is $3.30. That implies a possible rise of almost 50%.

What are the positives on Adairs?

One of the main things that brokers have noted is the company’s acquisition of Focus on Furniture. This gave the business more exposure to the large furniture category.

Management is hoping to grow the Focus on Furniture store network across the country. Adairs is also planning to expand the range offered by the business. Another initiative is to grow the online sales of Focus, as well as the rest of the group. Adairs thinks that Focus on Furniture can reach sales of at least $250 million within five years.

Another thing that can help Adairs’ returns is the dividend. Based on the estimates, Morgans currently thinks that Adairs could pay a grossed-up dividend yield of 12% in FY22 and over 16% in FY23.

The company is also focused on upsizing some Adairs stores, growing its membership numbers and adding a physical presence for Mocka. Morgans likes the Mocka expansion potential.

In the second half of FY22, Adairs is expecting to open one or two new stores and upsize four to six existing stores.

Recent trading performance can be important for the Adairs share price. The business said that in the first seven weeks of FY22, its group like-for-like sales were essentially flat, down only 0.3%. However, including Focus on Furniture, total sales were up 33.8%. Mocka sales were up 14.8% and Adairs online sales were up 9.7% over the first seven weeks of the second half period of FY22.

The Adairs share price opens trade on Monday at $2.22.

The post What’s on the horizon for the Adairs share price in June? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Adairs right now?

Before you consider Adairs, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Adairs wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ADAIRS FPO. The Motley Fool Australia has positions in and has recommended ADAIRS FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/8ZUJ5ts

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s