Harvey Norman Holdings Ltd (ASX: HVN) shares are slipping today.
Shares in the S&P/ASX 200 Index (ASX: XJO) electronics and home furnishings retail stock closed yesterday trading for $5.41. In early afternoon trade on Wednesday, shares are swapping hands for $5.38 each, down 0.6%.
For some context, the ASX 200 is up 0.4% at this same time.
Harvey Norman shares have struggled in 2026, now down 23.5% year to date. However, after a strong run in 2025, the ASX 200 stock remains up 5.1% over 12 months.
Atop those capital gains, Harvey Norman also paid out (or shortly will pay out) two fully-franked dividends over the full year, totalling 29 cents a share. This sees the stock trading on a 5.4% fully-franked dividend yield (partly trailing, partly pending).
But despite that appealing passive income, Investor Pulse's Mark Elzayed believes investors would do well to sell the stock (courtesy of The Bull).
Image source: Getty Images
Time to sell Harvey Norman shares?
"Much of the operational recovery now appears reflected in the retail giant's share price," Elzayed said.
Commenting on the company's performance, he noted:
Fiscal year 2025 results and early fiscal year 2026 trading updates confirmed solid aggregated sales growth, aided by an improving UK performance and continuing strength in Europe.
As for his sell recommendation on Harvey Norman shares, Elzayed said, "Yet after a material re-rating over the past year, we see limited room for positive surprises. Competition in the consumer electronics category is intense."
And that "appealing" passive income isn't enough to sway his recommendation.
"While the dividend yield remains appealing, consumer discretionary sector headwinds leave valuation multiples looking extended, in our view," Elzayed concluded.
What's the latest from the ASX 200 retail stock?
Harvey Norman reported its half-year (H1 FY 2026) results on 27 February.
Highlights for the six months to 31 December included a 6.9% year-on-year increase in sales revenue to $5.16 billion, while earnings before interest and tax (EBIT) increased by 14.4% to $527.5 million.
On the bottom line, the company achieved a 15.2% increase in net profit after tax (NPAT) to $321.9 million.
"This is a very solid first-half result, with profit growth driven by higher system sales, disciplined cost control and strong performances across our franchising operations and overseas retail businesses," chairman Gerry Harvey said.
But with market expectations clearly high, Harvey Norman shares closed down 9% on the day of the results release.
