If you own shares in Super Retail Group Ltd (ASX: SUL), you might be wondering what analysts at Macquarie are thinking about the company and its share price at the moment.
This is the company behind retail brands like Supercheap Auto, Rebel, BCF, and MacPac, and it's fair to say, it hasn't been smooth sailing for the retailer. The company has had its fair share of controversy due to allegations of a workplace relationship involving the CEO, culminating in the dismissal of the CEO.
Now, the latest update from Macquarie has a neutral rating on Super Retail with a $17.30 price target. With Super Retail shares trading at $16.74 at the time of writing, that implies a modest 3% upside in the share price.
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Why Macquarie is cautious
Macquarie's analysts say the group's near-term outlook looks "evenly balanced" with a mix of encouraging results at Rebel and Macpac offset by softness at Supercheap Auto and BCF.
The broker noted:
- Supercheap Auto's like-for-like sales slipped 1.2%, suggesting the brand hasn't gained much share despite rival Autobarn struggling.
- BCF sales also underwhelmed, dragged by weaker Father's Day trading and poor NSW weather.
- Rebel and Macpac showed stronger trends, particularly in footwear and outdoor apparel.
However, Macquarie trimmed its FY26 earnings forecasts by 2% and lowered its valuation multiple to 9.7x EV/EBIT (from 10.7x) to reflect the group's shift toward the lower-margin Rebel business and the lingering cloud of an ASIC investigation into the former CEO's conduct.
The broker, however, sees the promotion of the BCF divisional head to the CEO role as a positive move, given their impressive track record at BCF and a lower likelihood of a major strategic reset (which would be more likely if an external CEO were appointed).
Foolish bottom line
All things considered, shares in Super Retail Group have done well given all the governance matters surrounding the company. The share price is up almost 10% so far this year, and whilst the results are mixed amongst its brands, the new CEO is well regarded by the market.
Macquarie believes Super Retail shares are fairly valued but is remaining cautious due to weakness at Supercheap and BCF, plus ongoing regulatory overhangs, which are offsetting strong performance at Rebel and Macpac. It's a fine balance between risk and potential reward.
For now, the broker's message is clear: Super Retail Group is a hold, not a buy or sell.
