The JB Hi-Fi Limited (ASX: JBH) share price will be one to watch next week when it releases its full year results.
Ahead of the release, I thought I would look to see what the market is expecting from the retail giant on 16 August.
What is expected from JB Hi-Fi in FY 2021?
While JB Hi-Fi has already pre-released its FY 2021 results, that doesn't mean there won't be things in it that could move the JB Hi-Fi share price.
Let's start with the knowns. Last month the company revealed that it expects to report unaudited sales of $8,916.1 million and net profit after tax of $506.1 million. This will mean growth of 12.6% and 67.4%, respectively, over the same period last year.
This top line growth was driven by strong sales momentum throughout the year following heightened demand for consumer electronics and home appliances. Whereas its bottom line growth was underpinned by significant operating leverage thanks to gross margin improvement and disciplined cost control.
What about the unknowns?
According to a note out of Goldman Sachs, it has suggested that investors watch out for its cash flow, drivers of performance across operating leverage and gross margins, and a trading update into July. The latter is particularly important given the ongoing lockdowns.
Goldman commented: "JBH has largely pre-announced its FY21 results (Sales, EBIT and NPAT). Key factors to watch out for during the upcoming results are the cash flow, drivers of performance across operating leverage and gross margins and trading update into July 2021 especially given the ongoing lockdowns."
"We forecast the group to report an operating cash flow of A$613.3mn (A$455.2mn pre-AASB16). We expect capital expenditure to have been A$56.8mn and the group to have maintained a net cash position of A$310mn (excl. leases or A$374.3mn including lease liabilities). We expect the group to announce a final dividend of A¢107 for FY21."
Is the JB Hi-Fi share price good value?
Goldman Sachs continues to sit on the fence with the JB Hi-Fi share price.
It has retained its neutral rating and $49.40 price target. Based on the current JB Hi-Fi share price of $48.14, this implies potential upside of ~2.6% before dividends. Though, with dividends this potential return stretches to a more attractive ~8%.
