By Peet Serfontein & Sithembile Bopela
The Foschini Group is an investment holding company with a core business focus in retail and financial services. The group comprises several brands trading throughout southern Africa offering a prominent lifestyle range of household name brands including Foschini, ®Home, Sterns, Totalsports, Sportscene and Jet, among others. The group also owns Phase Eight and Whistles in the United Kingdom, and RAG in Australia.
Fundamentally, the company is the market leader locally in 'quick response' manufacturing and has the design and manufacturing capability to lead the market from a stock perspective. Geographic, product, and diversification across target markets adds a defensive component to the business. This company, along with its discretionary retail peers, could benefit from easier consumer conditions near term.
Technically, a falling wedge pattern in the price makes the share an appealing investment opportunity (see the first insert on the main chart). This pattern typically signals a potential reversal within a broader downtrend as it reflects a gradual loss of selling momentum often accompanied by decreasing volume.
A confirmed breakout above the upper trendline is usually interpreted as a strong bullish signal, especially if supported by rising volume, indicating renewed buying interest.
The price remains below its 200-day simple moving average (SMA) but appears to be finding support above its 200-week SMA. This also supports the bullish bias (see the second insert on the main chart).
We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R131.
| Share Information | |
|---|---|
| Share Code | TFG |
| Industry | Consumer Discretionary |
| Market Capital (ZAR) | 42.36 billion |
| One Year Total Return | 28.15% |
| Return Year-to-Date | -23.83% |
| Current Price (ZAR) | 127.97 |
| 52 Week High (ZAR) | 178.67 |
| 52 Week Low (ZAR) | 91.11 |
| Financial Year End | March |
| Several technical indicators are pointing to upside potential from current levels. Expect moderate volatility in the price going forward. | |
| Consensus Expectations (Bloomberg) |
||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (ZAR) | 9.65 | 10.36 | 12.19 | 14.08 |
| Growth (%) | 7.37 | 17.68 | 15.54 | |
| Dividend Per Share (ZAR) | 3.50 | 3.85 | 4.49 | 5.57 |
| Growth (%) | 10.06 | 16.67 | 23.97 | |
| Forward PE (times) | 12.36 | 10.50 | 9.09 | |
| Forward Dividend Yield (%) | 3.01 | 3.51 | 4.35 | |
| Earnings growth expectations remain attractive over the medium term. | ||||
Buy/Sell Rationale:
Technical Analysis:
Long term Fundamental view
| Share Name and Position | VOD - BUY (Continue to hold) |
CML - BUY (Continue to hold) |
REM - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 109.87 | 37.75 | 145.56 |
| Current | 116.80 | 39.96 | 152.71 |
| Movement | +6.3% | +5.9% | +4.9% |
|
The price volume swing remains of interest. Remains above its 200-day simple moving average (SMA), and the 200-week SMA may act as major resistance. However, it seems like the 200-week SMA acted as major resistance. Fading upside momentum is a concern.
Our profit target is R125, with a trailing stop-loss at R110. Exit the trade around 7 April 2025. |
The price is at the pivotal point of remaining above both the 200-day and 200-week SMAs, which remains of interest. Upside price momentum supports the trade idea.
Our profit target is R42 with a trailing stop-loss at R38.25. Time to exit: 19 May 2025. |
The price is developing a base, which remains of interest. Remains above its 200-day SMA. The start of upside price momentum supports the trade strategy.
Our profit target is R196, with a trailing stop-loss at R169.50. Exit the trade around 26 May 2025. |
| Share Name and Position | APN - BUY (Continue to hold) |
GRT - BUY (Continue to hold) |
JSE - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 171.38 | 13.22 | 130.10 |
| Current | 174.70 | 13.07 | 126.07 |
| Movement | +1.9% | -1.1% | -3.1% |
|
The price is testing major support, which remains of interest. Remains below its 200-day SMA, and the trade idea is regarded as a counter-trend strategy. Upside momentum has halted, which is a concern.
Our profit target is R196, with a trailing stop-loss at R165. Exit the trade around 26 May 2025. |
The price is trading at one of the highest price bins in its price distribution, which remains of interest. Remains just above its 200-day SMA. Upside price momentum supports the trade strategy.
Our profit target is R16, with a trailing stop-loss at R12. Exit the trade around 17 November 2025. |
The price is in a trough, as per the Elliott Wave theory, which remains of interest. Remains above its 200-day SMA. Fading upside price momentum is a concern.
Our profit target is R145 with a trailing stop-loss at R124.50. Exit the trade around 19 May 2025. |
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