MENU

Is the Myer Holdings Ltd share price in the buy zone after yesterday’s huge decline?

On Monday the Myer Holdings Ltd (ASX: MYR) share price was one of the worst performers on the Australian share market with a massive 9.5% fall to $1.00.

With no news out of the department store operator, the catalyst for this decline appears to have been a research note out of Credit Suisse.

As you might have guessed, it wasn’t a positive one. Analysts at the investment bank downgraded Myer to an underperform rating with a 82 cents price target. Prior to yesterday Credit Suisse had an outperform rating and a $1.44 price target on its shares.

According to the note, its analysts are concerned about the impact that retail behemoths Amazon and TK Maxx will have on its sales, especially considering the weak consumer spending Australia is experiencing.

Should you buy the dip?

After yesterday’s decline Myer’s shares are changing hands at just under 11x trailing earnings.

Whilst this is dirt cheap in comparison to retailers such as Premier Investments Limited (ASX: PMV) and Greencross Limited (ASX: GXL), I’m not sure I would be in a rush to invest in its shares just yet.

I have been very impressed with the work that the retailer has done to turnaround its performance, but the potential arrival of Amazon and the expansion of the TK Maxx store network could undo all of its hard work.

Because of this I would suggest investors hold off an investment for the time being. Unless Premier Investments comes in with a takeover offer, I can’t see its shares climbing meaningfully higher in the next 12 months.

In the meantime there is a retail share which I think is a buy today. Thanks to its HUGE dividend and international expansion plans, it could prove to be one of the best options on the market.

1 Massive Dividend Stock to Buy Today (6.7% Current Gross Yield!)

FREE REPORT! Click here to discover the Motley Fool's #1 ASX dividend recommendation - currently paying a 6.7% gross yield!

Even better, this 'under the radar' consumer play is growing like gangbusters. Shares have rocketed 100% in the last 5 years, DOUBLING shareholders' investment. So what's not to like?

Simply click here to grab your free copy of this up-to-the-minute research report right now.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Premier Investments Limited. Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Greencross Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

HOT OFF THE PRESSES: My #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.