JB Hi-Fi Ltd (ASX: JBH) shares had a tough time on Wednesday.
The retail giant's shares ended the day 7% lower following the release of a trading update.
This means its shares are now down 40% from their 52-week high of $121.00.
Does this make JB Hi-Fi shares a bargain buy? Let's see what Bell Potter is saying.
Image source: Getty Images
Are JB Hi-Fi shares a bargain buy?
Bell Potter notes that JB Hi-Fi's trading update suggests that the key JB Hi-Fi Australia business is performing in line with its expectations in FY 2026.
The same cannot be said for The Good Guys business, which "saw some easing in growth at 2.5% and came in slightly below BPe."
In response, the broker has made some small revisions to its revenue and earnings expectations. It explains:
We make changes to our revenue assumptions factoring in the GG and e&s performance in the trading update and accounting for some easing within our JBH Aus comparable sales in meeting the current challenging 4Q26 comps. The key division would cycle +8.2% comparable sales during the seasonal quarter and our revised estimates see +1.8% for 4Q26e and +2% for 2H26e and +3% thereafter.
We also apply some conservatism through our FY27/28e forecasts to see market share retention offset by some investment in gross margins, hovering around the 22% level for the overall business and a broadly flat CODB % of sales, with operating margins improving from a low point in FY27e. The net result sees our NPAT forecasts -1%/- 3%/-3% for FY26/27/28e.
Should you invest?
Bell Potter continues to see value in JB Hi-Fi shares at current levels.
It has responded to the update by retaining its buy rating on the retailer's shares with a trimmed price target of $87.00 (from $90.00).
Based on its current share price of $72.98, this implies potential upside of 19% for investors over the next 12 months.
In addition, the broker expects dividend yields of 4.5% in FY 2026, 4.6% in FY 2027, and 4.9% in FY 2028. This stretches the total potential return beyond 23%.
Bell Potter thinks JB Hi-Fi shares are good value at 17x estimated FY 2026 earnings. It said:
Our PT decreases by ~3% to $87.00 (prev. $90.00) driven by our modest earnings revisions (BPe below Cons), skewed to FY27/28e. While we expect the overall Consumer Discretionary sector to remain challenged through CY26, our preference for JBH is supported by our view as semi-discretionary characteristics seen in the name and ability to maintain market share over a longer-term vs smaller competitors as short term product challenges are mitigated through 4Q26. Trading at ~17x FY26/27e P/E (BPe), we see valuation support and maintain our BUY rating.
