Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Hallenstein raised to buy at Craigs, selloff overplayed

Hallenstein, worst-performing stock on NZX 50 this year, raised to buy from hold at Craigs

By Tina Morrison

Feb 26 (BusinessDesk) – Hallenstein Glasson Holdings, the worst performer on New Zealand’s benchmark NZX 50 Index this year, was upgraded to ‘buy’ from ‘hold’ by brokerage Craigs Investment Partners, which said weakness in the stock has been overplayed.

Shares in Hallenstein have dropped 21 percent so far this year, lagging a 4.9 percent gain in the benchmark index, and last changed hands at $3.05. In a note published yesterday, Craigs raised its 12-month target price on the stock to $3.84 from $3.51.

Hallenstein, which operates the Hallensteins, Glassons and Storm clothing stores in New Zealand and Australia, has cut its earnings guidance three times since June last year, contributing to a stock price decline of more than 40 percent.

While the downgrades were not a good trend, the company’s sales have historically outperformed general clothing and footwear sales and lagged the market only in December, when sales declined 10 percent from the year earlier compared with market growth of 2 percent, Craigs said.

“In our view, one month’s poor performance versus the market does not justify Hallenstein’s share price de-rating,” Craigs analyst Chris Byrne said in the note. “It is difficult to conclude that structural concerns are the key driver and as a result we expect earnings to recover.

“One month’s relative underperformance in December should not be extrapolated forward given Hallenstein’s strong track record and the fickle nature of apparel retailing.”

The performance of womenswear fast-fashion clothing chain Glassons may have been dented by a lack of dedicated leadership in an extremely competitive women’s apparel market after the loss of New Zealand managing director Di Humphries in October 2012, with a 15-month gap before a replacement started, Byrne said.

Earnings per share should recover strongly in the company’s 2015 financial year given it will be measured against weak comparative periods, Byrne said. He expects earnings per share of 29.3 cents in the year ending July 31, 2015, from an expected 24.5 cents in 2014 and 31 cents in 2013.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

GDP: NZ Economy Grows Faster-Than-Forecast 0.7%

New Zealand's economy grew at a faster pace than expected in the first quarter of 2016 as construction expanded at the quickest rate in two years. The kiwi dollar jumped after the data was released. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news