MARKETS SPECTATOR: Retail rewind

Citigroup says the retail rally is overdone, while Harvey Norman offers the strongest earning prospects.

Citigroup is a bear on retail stocks. In a note today the firm says it has "sells" on the large discretionary retailers.

Citigroup said in a note that Harvey Norman has the greatest earnings upside, while Myer offers the best relative valuation.

At 1231 AEDT Harvey Norman shares were up 7 cents to $2.855. Myer’s stock had slipped 3 cents to $2.93.

Citigroup suggests the retail share rally is overdone.

“It is plausible there is a wealth induced retail sales spike over the next six months.” 

“As interest rate stimulus fades, sales will subside.”

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free