Myer Holdings Ltd (ASX: MYR) shares are pushing higher today.
Shares in the S&P/ASX 300 Index (ASX: XKO) department store owner closed on Friday trading for 46.5 cents apiece. In morning trade on Monday, shares are changing hands for 47.0 cents apiece, up 1.1%.
For some context, the ASX 300 is up 0.7% at this same time.
Despite that welcome lift, Myer shares remain down a sharp 27% from last Monday's opening price.
Those losses were driven by the 25.0% share price crash on Tuesday, 23 September, following the release of the company's full-year FY 2025 results.
What got ASX investors spooked?
Investors were favouring their sell buttons on Tuesday after the company reported FY 2025 sales of $3.67 billion, up a slender 0.5% from FY 2025.
And Myer shares caught headwinds after earnings took a big turn for the negative, with earnings before interest and tax (EBIT) of $140 million, down 13.8% year on year.
On the bottom line, underlying net profit of $37 million was down 30% year on year. And the department store owner reported a statutory net loss of $211 million. That loss was driven by the write-down of goodwill of its new division Myer Apparel Brands.
But according to Canaccord Genuity, investors may have overreacted with last week's sell-down, with the broker forecasting a big rebound ahead.
Why Myer shares could come roaring back
Allan Franklin, senior analyst at Canaccord Genuity, has a decidedly bullish outlook for Myer shares.
Franklin noted that the company's FY 2025 results "contained some new negatives, namely more heightened than expected CODB [cost of doing business] pressure and a large write-down of goodwill relating to the Apparel Brands acquisition".
However, Canaccord believes the market is missing the more positive story that's unfolding.
According to the broker:
Operating momentum in 4Q25 looked solid (Myer Retail sales +4%, Just Jeans strengthening) with gross margin execution comforting (flat OGP rate Apparel Brands albeit some compression Myer Retail).
A stronger start to 1H26E and a more robust consumer, should provide scope for solid gross profit delivery in FY26E, in our view. We have however allowed for an additional CODB relative to prior thinking, which sees downward FY26E revisions.
As for the three reasons that "anchor what should be a much larger operating profit" for Myer shares in FY 2027 and FY 2028, Canaccord's Franklin noted:
- Execution on cost synergies ($30 million annualised by 1H27E)
- A long-term solution for the company's distribution centre woes ($20 million annualised benefit by FY28E albeit with a $32 million cost to deliver)
- A targeted $10 million turnaround in SBMDL [Sass & Bide, Marcs, and David Lawrence]
Canaccord retained its buy rating on the ASX 300 retail stock with a 79-cent per share price target (down from the prior $1.05). That represents a potential upside of 68% from the current Myer share price.
