The JB Hi-Fi Limited (ASX: JBH) share price has continued its positive run on Tuesday.
Earlier today the retail giant’s shares climbed to a new record high of $53.34.
When the JB Hi-Fi share price hit that level, it meant it was up 43% since this time last year.
Can the JB Hi-Fi share price continue to climb higher?
One leading broker that isn’t betting on the JB Hi-Fi share price going higher from here is Goldman Sachs.
According to a note out of the investment bank this morning, the broker has retained its neutral rating and lifted its price target on the retailer’s shares to $51.60.
This follows the release of its guidance for the first half of FY 2021 on Monday.
What did Goldman Sachs say?
Goldman notes that JB Hi-Fi’s first half performance was ahead of its expectations for both sales and earnings growth thanks to the stay at home trend.
And while it is forecasting a strong full year result in August and a better than previously expected result in FY 2022, it is still expecting its earnings to decline next year and then again in FY 2023 as the tailwinds it is experiencing ease.
Goldman said: “JBH has benefited from a strong spending trend in “stay at home” products, but also continues to execute strongly in store and online, remaining at the forefront of technology categories as they continue to deliver growth.”
“We anticipate conditions to remain elevated over 2H21 before normalising back to a more sustainable trend over FY22 and FY23. However, the underlying level of earnings have also been revised upwards in FY22 reflecting the slower decline in conditions than previously anticipated in our forecasts as the outlook for other spending alternatives (e.g. international travel) remain constrained,” it added.
Goldman Sachs is forecasting earnings per share of $4.18 in FY 2021, $3.02 in FY 2022, and then $2.90 in FY 2023. This compares to earnings per share of $2.81 last year.
This means its shares are trading at approximately 18x FY 2022 and FY 2023 earnings, which it feels makes them fully valued at the current level.
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More reading
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Motley Fool contributor James Mickleboro 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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