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

 

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news