Accent Group Ltd (ASX: AX1) shares have been on fire this week.
Since this time last week, the ASX share has risen 17%.
The catalyst for this has been a low-ball takeover offer from one of the footwear retailer's shareholders.
Is it too late to invest? Let's see what analysts at Bell Potter are saying.
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Is this ASX takeover target a buy?
Commenting on the takeover offer, Bell Potter said:
Accent Group (AX1)'s major shareholder with a 22.9% holding (as last reported), UK based Frasers Group (FRAS) made an on-market takeover bid on Monday morning. The current takeover bid represents no premium to the last close of $0.65 at the time and below the levels FRAS last acquired AX1 shares in Jan/Feb-26 at $0.90- 0.95/share. We see this as an opportunistic bid at a time when AX1 navigates cyclical low macroeconomic conditions especially in its key lifestyle footwear market (~60% of the group) with the broader category trending flat to negative in Australia and multiple earnings downgrades resulted from weak market conditions & poor performance from non-core businesses.
The broker has been looking into how much it thinks Accent shares are worth and has concluded that fair value is 80 cents per share. It explains:
Our previous 12-month based price target was A$0.60/share. We now utilise a terminal value-based price target for AX1, based on a terminal earnings base (historically last seen in FY23), in addition to cost cuts needed to achieve this level of earnings from our current low level of earnings base in FY27e. Thereafter we factor in a discount for the potential removal of certain brands within the poor performing lifestyle footwear division in reaching a fair value for AX1 shares. Our valuation of A$0.80/share sees ~23% upside from the present bid from FRAS.
Should you invest?
According to the note, Bell Potter has retained its hold rating on the ASX takeover target with an improved price target of 80 cents. This implies potential upside of 6.7% for investors from current levels.
In addition, it is forecasting fully franked dividend yields of 5.3% in FY 2026 and then 4.6% in FY 2027.
Commenting on its recommendation, the broker said:
There are no changes in our forecasts as we've recently downgraded our estimates (published on 20-May-26), however we revise down our expectations on forward dividend payments (BPe forward dividend payout of 62-64% vs prev. 72-74%). Our PT increases by ~33% to $0.80/share (prev. $0.60/share) as we consider a terminal valuation for the stock. Maintain HOLD.
