The Harvey Norman Holdings Limited (ASX: HVN) share price is on form again on Friday and is pushing higher.
In afternoon trade, the retail giant’s shares are up 3.5% to a multi-year high of $4.93.
This latest gain means that the Harvey Norman share price is now up 41% over the last six months.
As a comparison, the S&P/ASX 200 Index (ASX: XJO) is up a solid 13.8% over the same period.
Why is the Harvey Norman share price at a multi-year high?
Investors have been buying Harvey Norman’s shares over the last few months thanks to its strong performance during the pandemic.
In November, the retailer released a trading update which revealed stellar sales growth so far in FY 2021.
According to the release, aggregated sales revenue increased by 28.2% between 1 July and 21 November compared to the prior corresponding period.
Management advised that this was driven by strong same store sales growth across almost all regions and particularly in the ANZ market.
Harvey Norman’s Australian franchisees delivered a 30.4% increase in comparable store sales and its New Zealand stores reported a 20.4% lift in comparable store sales. This includes stores that were temporarily closed due to COVID-19.
Pleasingly, Harvey Norman’s profit growth has been even stronger in FY 2021 thanks to margin expansion. Between 1 July and 31 October, the company reported unaudited profit before tax growth of 160.1% on the prior corresponding period.
Can the Harvey Norman share price go even higher?
Two brokers that believe Harvey Norman’s shares can still go higher are Citi and Credit Suisse.
Citi has a buy rating and $5.50 price target on its shares, whereas Credit Suisse has an outperform rating and $5.30 price target on its shares.
Citi’s price target implies potential upside of over 11% even from the multi-year high it reached today. That doesn’t include the very generous 45 cents per share fully franked dividend it is forecasting.
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Motley Fool contributor James Mickleboro 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.
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