Can the JB Hi-Fi share price still be a buy at an all-time high?

Can a stock at an all-time high be good value?

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The JB Hi-Fi Limited (ASX: JBH) share price has surged an impressive 29% in the past six months. Can the ASX retail share perform well from here?

JB Hi-Fi is one of Australia's leading retailers, selling a wide array of personal electronics and appliances through three divisions – JB Hi-Fi Australia, JB Hi-Fi New Zealand and The Good Guys.

Strength of performance

Our phones and computers have become heavily integrated parts of our lives. We use them for communication, work, education, entertainment, online banking, online shopping and so on. I think that has set the business up to deliver more defensive earnings than some investors may have initially thought.

The company's recent trading update for the first three months to 30 September 2023 showed JB Hi-Fi Australia sales fell only 0.1% and JB Hi-Fi New Zealand sales were up 1%, though The Good Guys sales were down 12.2%.

The JB Hi-Fi side of the business is doing really well, considering the current economic environment of higher interest rates and elevated living expenses for households.

I think the strength of the business is really coming through, despite the difficulties.

However, it is interesting that the JB Hi-Fi share price is higher now than when it was generating more profit during COVID-19. This is at a time when interest rates are much higher, which should put pressure on valuations.

But, at the same time, I think it would be a mistake to think JB Hi-Fi's profit or share price can't ever be higher than a prior peak.

As Australia's population grows, that means more potential customers needing a phone, fridge or another such item. The business can benefit from opening new stores, increased scale, growing its online sales and so on.

What is the JB Hi-Fi share price valuation now?  

The company's expected profit in FY24 is forecast to fall compared to FY23 – it could make earnings per share (EPS) of $3.52. This would put the JB Hi-Fi share price at 16x FY24's estimated earnings, according to Commsec.

If JB Hi-Fi makes enough profit, then it could pay shareholders a good amount of cash in FY24.

At the moment, the dividend projection for FY24 is $2.30 per share. That means the forward grossed-up dividend yield could be 5.7%.

With the RBA interest rate still above 4%, it's possible the JB Hi-Fi share price may have gotten ahead of itself in the short term. But, I think the company has an appealing long-term future. It's a great business, so I'd be willing to buy with a multi-year ownership plan in mind.

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Motley Fool contributor Tristan Harrison 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 recommended Jb Hi-Fi. 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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