The Super Retail Group Ltd (ASX: SUL) share price is pushing higher on Wednesday.
In afternoon trade, the retail conglomerate’s shares are up 1.5% to $11.90.
Today’s gain means the Super Retail share price is now up 94% since this time last year.
Is the Super Retail share price still good value?
The good news is that if you missed out on the incredible gains made by the Super Retail share price over the last 12 months, it still may not be too late to invest.
Based on the current Super Retail share price, this implies potential upside of 26% over the next 12 months excluding dividends.
If you include the 84 cents per share fully franked dividend that Goldman expects Super Retail to pay in FY 2021, this potential return stretches to over 33%.
What did Goldman Sachs say?
Goldman was pleased with Super Retail’s trading update and believes it is well-placed to deliver a strong full year result.
It commented: “Super Retail provided a trading update reflecting further strong momentum in sales growth across all divisions. Group LFL sales were +28% for the 44 weeks YTD, implying +37% for the latest 11 weeks, an acceleration vs. 30.5% in the 1st 7 weeks of 2H21.”
“While pcp trading was weak in April (-26.2%), we estimate 2yr CAGR growth of c. 11.6% for the 11 weeks implying momentum has remained strong vs. our expectations even when adjusted for the volatility in the base. Our revised sales forecasts reflect a 2 year CAGR growth of c. 11.7% for the remainder of 2H21.”
Goldman also notes that management spoke positively about margins and its inventory position.
Overall, this supports the broker’s view that Super Retail’s brands are going to continue to benefit whilst international borders remain shut.
It said: “The ongoing momentum in trading for SUL reinforces our view that the group’s brands are likely to see prolonged elevated trading due to its exposure to categories benefiting from heightened domestic tourism.”
“Overall, we revise group EBIT forecasts by +4.1% in FY21 but less materially over FY22/FY23 (+0.1%). Our 12m Target Price on SUL remains unchanged at A$15, offering a total potential return of c. +35.2%. We maintain our Buy rating on SUL,” Goldman concluded.