On Friday, Canaccord Genuity initiated coverage on Myer Holdings Ltd. (MYR:AU) (OTC: MYRSY), an Australian department store chain, with a Buy rating and a price target of AUD1.25. The firm's analysis highlights Myer's consistent revenues and profits since FY18/19, which they believe underplays the company's enhanced customer experience and a more robust business model.
The report acknowledges Myer's strategy shift toward a greater focus on owned-brands and the potential benefits of its loyalty program strategies. Canaccord Genuity is closely observing Myer's ability to leverage its broad customer base, although the firm notes that the full details of these standalone strategies have not been completely disclosed.
Canaccord Genuity also points to the importance of the Just Group (LON:JUSTJ) merger, announced in October, in shaping investor sentiment. The merger is expected to be a significant factor for Myer, with at least $30 million in synergies projected to influence the company's performance over the next two years.
The coverage note describes Myer as a unique investment opportunity, citing its leading brand presence and improved potential for omni-channel monetization. The analyst sees medium-term growth prospects for Myer, primarily through cost and margin execution, and finds the company's valuation attractive, trading at approximately 13 times PE on Canaccord Genuity's estimated 'look-through' NPAT.
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