JB Hi-Fi (ASX:JBH) share price charges higher on broker upgrade

This retailer's shares could be in the buy zone…

| More on:
A happy shopper lifts her bags high, indicating a rising share price in ASX retail companies

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The JB Hi-Fi Limited (ASX: JBH) share price was a strong performer on Thursday.

The retail giant's shares ended the day with a gain of 3% to $45.52.

Why did the JB Hi-Fi share price charge higher?

As well as benefiting from a strong day by the S&P/ASX 200 Index (ASX: XJO), JB Hi-Fi's shares were given a boost by a bullish broker note.

According to the note out of Citi, its analysts have upgraded the retailer's shares to a buy rating from neutral.

And while the broker has trimmed its price target slightly from $55.00 to $53.00, this still implies material upside of 16% for the JB Hi-Fi share price over the next 12 months.

And that doesn't include the generous dividend the broker is forecasting in FY 2022. Citi has pencilled in a fully franked dividend per share of $2.28.

Based on the current JB Hi-Fi share price, this will mean a 4.3% yield, which extends the total potential return to over 20%.

What did the broker say?

Citi made the move on valuation grounds. It believes the recent pullback by JB Hi-Fi's shares has been overdone and created a buying opportunity.

The broker points out that the company's shares are changing hands at a discount of 40% to the ASX 200 index excluding resources shares. This is significantly greater than historical multiples.

Citi isn't alone with this view. The team at Credit Suisse also believe the company's shares are trading at an attractive level.

According to a note from earlier this month, the broker has an outperform rating and $53.66. This suggests there's almost 18% upside for the JB Hi-Fi share price from here.

This could make it one to consider if you're looking for options in the retail sector.

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

More on Share Gainers

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a rough start to the trading week for investors this Monday.

Read more »

two computer geeks sit across from each other with their laptop computers touching as they look confused and confounded by what they are seeing on their screens.
Share Gainers

ASX tech shares outperformed US tech stocks by 2:1 in FY25. Here's why

Forget the Magnificent 7! Aussie tech shares had twice as much price growth as US tech stocks in FY25.

Read more »

Three happy office workers cheer as they read about good financial news on a laptop.
Share Gainers

Why Bellevue Gold, Cobram, Hub24, and Nanosonics shares are pushing higher

These shares are starting the week on a positive note. But why?

Read more »

Hands reaching high for a trophy with a sunset in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a cracking end to the trading week for ASX investors.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Share Gainers

Why ARB, Cleanaway, Hub24, and RPMGlobal shares are storming higher today

These shares are ending the week with a bang. But why?

Read more »

Five people in an office high five each other.
Technology Shares

5 best performing ASX 200 tech shares of FY25

Some of the technology sector's biggest names led the charge in share price growth last financial year.

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Share Gainers

3 ASX shares that rose 100%+ in FY25

Let's see why these shares delivered huge returns for their shareholders in the last financial year.

Read more »

Silhouettes of nine people climbing a steep mountain to the top at sunset, and helping each other along the way.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors had a wild ride this Thursday.

Read more »