Myer Holdings Ltd (ASX: MYR) shares are slipping again today.
Shares in the S&P/ASX 300 Index (ASX: XKO) department store owner closed yesterday trading for 48 cents. In late morning trade on Wednesday, shares are swapping hands for 47.5 cents apiece, down 1.0%.
For some context, the ASX 300 is down 0.6% at this same time.
Unfortunately for stockholders, today's selling comes after Myer shares closed down a precipitous 25.0% on Tuesday. Investors rushed for the exits following the release of the company's decidedly underwhelming FY 2025 results.
But with shares in the ASX 300 retailer now down 61.4% in 2025, Morgan Stanley believes the stock is primed for a big rebound.
We'll take a look at that recommendation below.
But first…
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Why did ASX investors send Myers shares crashing on the company's results?
As mentioned up top, the company's full-year earnings results were less than impressive and fell below most analyst expectations.
In what the company said was a difficult year, pro forma sales growth came in at a tepid 0.5%, with FY 2025 sales at $3.67 billion. On the positive front, online sales grew 15.0% year on year to $819 million.
But that wasn't enough to prevent a 13.8% slump in earnings before interest and tax (EBIT) to $140 million.
On the bottom line, Myers shares came under pressure with underlying net profit of $37 million, down 30% on FY 2024. And the company booked a statutory net loss of $211 million, which was reported to be driven by the write-down of goodwill of new division Myer Apparel Brands.
And in bad news for passive income investors, the board opted not to declare a final dividend.
Can the ASX 300 retail stock rebound?
If you've been holding onto Myers shares through this year's steep losses, you may wish to keep holding tight. And if you don't own shares yet, you might want to buy the stock.
That's because the company's turnaround plan may be gaining traction.
Commenting on that plan yesterday, Myer CEO Olivia Wirth said:
We are making significant progress in executing our strategy for the Myer Group, building a diversified omni-channel retail powerhouse to drive growth and deliver sustainable returns for shareholders.
Wirth added that, "There is real momentum building across the business," with the planned relaunch of the Myer One loyalty program in October.
This saw Morgan Stanley maintain its overweight rating on Myer shares.
Although the broker cut its short-term share price target to 77.0 cents, that still represents a potential upside of more than 60% from current levels.
Commenting on that bullish outlook, Morgan Stanley equity analyst Julia de Sterke said (quoted by The Australian Financial Review):
We maintain an overweight rating in view of the strategy reset and turnaround opportunity from Apparel Brands integration, loyalty and efficiency improvements, with the potential to meaningfully improve EBIT margins.
