Premier Investments Ltd (ASX: PMV) shares were sold off this week after the company released a trading update, but the analyst teams at both Macquarie and Bell Potter think the sell-off went too far.
Both brokers now have a bullish share price target on the company, which they think will also deliver a solid dividend yield.
Before we get to the brokers' share price targets, let's have a look at the announcement which spooked the market.
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Profit to come in weaker than expected
Premier said in a statement to the ASX that its full-year sales would come in at $795.5 million, down 2% on the previous year, while EBIT was expected to come in at $176 million, down from earlier guidance given in March of $183 million.
The company said regarding the expected results:
Premier Retail has continued to make strong progress against the strategic initiatives outlined in its 1H26 results release on 20 March 2026. Peter Alexander's Peter's Dreamers loyalty program has continued to exceed expectations, driving strong customer engagement and insights. Also, pleasingly Smiggle's strategic reset to restore brand growth is well on track. Premier Retail is encouraged with the progress made to date and believes the refreshed direction positions the brand well for a return to sustainable growth. A key milestone was the launch of The Smiggle Club loyalty program in late July 2026, providing an enhanced loyalty offering to showcase the brand's upcoming new product direction to its core customer base.
Premier added that following sustained difficult trading conditions, it had decided to shut its three Peter Alexander stores in the UK, while it would maintain an online presence in that market.
Meanwhile in Australia and New Zealand, the company will open five new Peter Alexander stores in the first half of FY27, and will return the brand to Myer stores as a concession partner.
Premier Chair Solomon Lew said:
The discretionary retail conditions in 2H26 have been very challenging, in particular during the latter months of 2H26. Given this environment, the Board believes the FY26 Premier Retail Underlying EBIT result to be a creditable outcome being down 3.8% on the guidance given in March 2026. Premier maintains a strong balance sheet, we remain disciplined in our approach to capital and confident in the long-term outlook for Premier Retail.
Brokers say Premier Investments shares looking cheap
Bell Potter is forecasting a dividend yield of 6.5% from Premier and has a price target on the shares of $16.50, reduced from $18, compared to the current price of $11.96.
Macquarie is forecasting an even stronger dividend yield of 7.5%, and has a price target of $15.70 on Premier shares.
