Despite rebounding over the past couple of weeks, the Harvey Norman Holdings Limited (ASX: HVN) share price has fallen 20% this year.
This comes despite the company not releasing any announcements to the ASX since half year results in late February.
At the time of writing, the multi-national retailer's shares are swapping hands for $3.91, up 1.56% for the day.
What's dragging down Harvey Norman shares?
Investors have sent the Harvey Norman share price into freefall since March amid the gloomy outlook on the global economy.
With inflation levels soaring, this led the Reserve Bank of Australia (RBA) to significant ramp up interest rates.
In the March quarter, inflation rose by 5.1% which was the fastest annual pace over the past two decades.
Evidently, this affects consumer spending habits on discretionary items as the cost of debt gets more expensive.
It's worth noting that the S&P/ASX 200 Consumer Discretionary (ASX: XDJ) index also backtracked 20% in 2022.
What do the brokers think?
Given that the Harvey Norman share price is trading 10% off its 52-week low of $3.53, is this a bargain?
As reported by ANZ Share Investing, Macquarie cut its outlook to neutral from outperform for the multi-national retailer's shares.
In addition, the broker slashed its price target by 31% to $4.40 apiece.
This implies an upside of almost 12.5% based on today's price.
JP Morgan also refreshed its rating on Harvey Norman shares by dropping its 12-month price target by 20% to $4.50.
It appears that despite the price reduction, both brokers believe that the current share price is undervalued.
Harvey Norman share price snapshot
Market volatility on the ASX has led the Harvey Norman share price to sink 26% over the last 12 months. These losses have mostly come from the past three months.
On valuation grounds, Harvey Norman commands a market capitalisation of roughly $4.80 billion.
