Harvey Norman Holdings Ltd (ASX: HVN) shares have flown 52% higher in 2025 so far.
For context, the S&P/ASX 200 Consumer Discretionary Index (ASX:XDJ) is up approximately 15% in that same span.
What's behind the rise
Harvey Norman Holdings Limited (ASX: HVN) is the franchisor of Harvey Norman, a leading Australian-based retailer selling electrical, computer, furniture, and entertainment goods.
It sits within the top five largest consumer discretionary shares on the ASX based on market capitalisation.
Its strong performance this year has been driven by strong FY25 results with all divisions beating expectations. This was led by rapid growth in the Australian Franchising division.
It has also benefited from macroeconomic tailwinds, with interest rates dropping significantly in 2025.
The company has also had a strong start to FY26, with July sales up 9.9% overall and solid comparable growth across regions and key product categories.
Can Harvey Norman shares continue to rise?
Price targets out of brokers shows experts have differing opinions on Harvey Norman shares.
In the last week, The Motley Fool reported price targets of $7.70 and $7.75 from Citi Group and UBS respectively.
However yesterday, Ord Minnett updated its guidance on this consumer discretionary stock with a less bullish price target.
The broker said Harvey Norman's FY25 earnings were ahead of market expectations, as consumers opened their wallets after a long period of being constrained by high interest rates and persistent inflation pressure on households.
The broker also highlighted the company's second-half profit before tax (PBT) margin rose 81bps to 5.3% despite lease-related costs, with the FY25 margin of 5.5% (ex-pandemic) being the highest since 2010, and notes a strong start to FY26 with July franchised store sales up 6.6% year-on-year – well above the 3.7% consensus.
Post the result, we have raised our EPS forecasts by 8.1%, 10.9% and 12.0% for FY26, FY27 and FY28, respectively, to incorporate the benefits from the interest rate easing cycle and cost control on the Australian division and increased investment in its nascent UK operations. The EPS upgrades lead us to raise our target price on Harvey Norman to $5.90 from $4.50.
Despite the upgraded guidance, the target price is still well below yesterday's closing price of $7.15.
Based on the guidance out of Ord Minnett, Harvey Norman shares would be expected to fall more than 17%.
