Why is the JB Hi-Fi share price slumping today?

The JB Hi-Fi Limited (ASX: JBH) share price is falling wayside on Thursday despite no announcements from the company.

The S&P/ASX 200 Index (ASX: XJO) is up 0.78% during midday trade, but can’t seem to get JB Hi-Fi shares over the line.

At the time of writing, the retailer’s shares are swapping hands at $41.81, down 4.57%.

Let’s take a look at what is causing the share to fall today.

What’s going on with JB Hi-Fi shares?

Following the retailer’s full-year results last week, investors are selling off JB Hi-Fi shares as they go ex-dividend today.

This means if you purchased the company’s shares yesterday or before and owned them at today’s market open, you’ll be eligible for the latest dividend.

When a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because after securing the dividend, investors try to make a quick profit.

For those who are set to receive JB Hi-Fi’s final dividend, a payment of $1.53 per share will be made on 9 September. The dividend is also fully franked.

This brings the FY2022 dividend to $3.16 per share, reflecting a 10.1% increase compared to the prior corresponding period.

The board has adopted a policy of monitoring the dividend payout ratio and targeting a payout ratio of 65% of NPAT. Whilst ensuring adequate capital is retained for the growth of the business, it also aims to deliver shareholder returns.

Are JB Hi-Fi shares a buy?

Following the company’s 2022 financial scorecard, a number of brokers updated their outlook on JB Hi-Fi shares.

According to ANZ Share Investing, Jefferies downgraded its rating to underperform from hold. In addition, the broker cut its price target by 14% to $38.50 per JB Hi-Fi share. Based on the current price, this implies a downside of 8%.

On the other hand, Macquarie and Citi raised their price targets by 1% to $41.30, and 6.4% to $50, respectively.

Citi’s bullish broker note implies an upside of almost 20% from where JB Hi-Fi trades today.

JB Hi-Fi share price snapshot

For the first half of 2022, the JB Hi-Fi share price travelled sideways before sinking to a 52-week low of $36.69 in June. While there has been some recovery of late, it’s still 36% off its all-time high of $56.85.

JB Hi-Fi has a price-to-earnings (P/E) ratio of 10.13 and commands a market capitalisation of approximately $4.57 billion.

The post Why is the JB Hi-Fi share price slumping today? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares going ex-dividend tomorrow
• Why are ASX 200 retail shares having such a stellar run today?
• 2 surprisingly ‘robust’ ASX shares to buy in current climate: expert
• JB Hi-Fi share price dips as full-year dividend jumps 43%
• Could this ASX 200 share be heading for a short squeeze?

Motley Fool contributor Aaron Teboneras 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 Scott Phillips.

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