By Peet Serfontein & Pritu Makan
We initiate a long position. Our upside target is set at R267. We recommend a stop-loss at R199.
Mr Price Group and its subsidiaries operate over 2 900 retail stores across southern Africa, focusing on clothing, footwear, accessories, and homeware across the value spectrum. These chains are divided into three operational divisions namely, Apparel (Mr Price, Mr Price Sport, Mr Price Kids, Miladys, Power Fashion, and Studio 88), Home (Mr Price Home, Sheet Street, and Yuppiechef), and Telecoms (Cellular).
Technically, the price is forming wave 5 based on the Elliott Wave theory, which makes for an attractive investment opportunity (see the insert) - wave 5 often reflects a renewed push by market participants following the corrective fourth wave. The price is also in an accumulation phase of the Wyckoff cycle which further supports our bullish bias. During this phase, the share price tends to stabilise after a prolonged decline, forming a well-defined trading range characterised by higher lows and consistent demand absorption.
The price remains below its 200-day simple moving average (SMA) of R247.62, but recently bounced off the 200-week SMA. This offers a constructive technical signal as it suggests that long-term support is being respected by the market. A reclaim of the 200-day SMA could act as a secondary confirmation of bullish intent, paving the way for renewed upward momentum and increased investor participation.
Fading downside momentum, according to the Moving Average Convergence Divergence (MACD) histogram indicator also supports the trade idea.
We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R228.
| Share Information | |
|---|---|
| Share Code | MRP |
| Industry | Consumer Discretionary |
| Market Capital (ZAR) | 58.3 billion |
| One Year Total Return | 43.35% |
| Return Year-to-Date | -25.93% |
| Current Price (ZAR) | 218.69 |
| 52 Week High (ZAR) | 301.54 |
| 52 Week Low (ZAR) | 155.36 |
| Financial Year End | March |
| The share price has been under pressure year-to-date, however, several technical indicators suggest that a sustained recovery is imminent. Expect moderate volatility in the price. | |
| Consensus Expectations (Bloomberg) |
||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (ZAR) | 12.53 | 14.18 | 16.53 | 18.43 |
| Growth (%) | 13.16 | 16.59 | 11.55 | |
| Dividend Per Share (ZAR) | 8.10 | 9.16 | 10.68 | 11.91 |
| Growth (%) | 13.02 | 16.60 | 11.50 | |
| Forward PE (times) | 15.43 | 13.23 | 11.86 | |
| Forward Dividend Yield (%) | 4.19 | 4.88 | 5.44 | |
| Good earnings growth is expected over the forecast horizon. | ||||
Buy/Sell Rationale:
Technical Analysis:
Long term Fundamental view
| Share Name and Position | CLS - BUY (Continue to hold) |
REM - BUY (Continue to hold) |
GRT - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 356.38 | 145.56 | 13.22 |
| Current | 380.01 | 149.98 | 12.25 |
| Movement | +6.6% | +3% | -7.3% |
|
A correction from a steep downward trend remains of interest. Crossed above its 200-day simple moving average. The start of upside momentum supports the trade strategy.
We maintain our profit target at R399.00 with a trailing stop-loss at R361.00. Exit the trade around 30 June 2025. |
The price is developing a base. Crossed above its 200-day simple moving average. Fading downside momentum supports the trade strategy.
We maintain our profit target at R164.00 with a trailing stop-loss at R143.00. Exit the trade around 2 June 2025. |
The price is trading at one of the highest price bins out of the price distribution analysis, which remains of interest. Remains below its 200-day simple moving average. Downside momentum halted, supporting the trade strategy.
We maintain our profit target at R16.00 with a trailing stop-loss at R12.00. Exit the trade around 17 November 2025. |
FNB Stockbroking and Portfolio Management (Pty) Ltd, a subsidiary of FirstRand Bank Limited, an authorised Financial Services Provider and authorised user of the JSE limited (Reg no: 1996/011732/07). This Publication note is issued by FNB Stockbroking and Portfolio Management (Pty) Ltd for the information of clients only and should not be produced in whole or part without prior permission. Although FNB Stockbroking and Portfolio Management (Pty) Ltd is an Authorised Financial Services Provider, any opinions and/or analysis contained in this Publication are for informational purposes only and should not be considered advice, including but not limited to financial, legal or tax advice, or a recommendation to invest in any security or to adopt any investment strategy. The information contained herein has been obtained from sources/persons which we believe to be reliable but is not guaranteed for correctness, completeness or otherwise and we do not assume liability for loss arising from errors in the information or that may be suffered from using or relying on the information contained herein irrespective of whether there has been any negligence by us, our affiliates or any other employees of us, and whether such losses be direct or consequential. As market and economic conditions are subject to rapid change, any comments, opinions, and analysis is rendered as of the date of publishing and may change without notice. Such changes may have a material impact on the outcome of any investment. Securities involve a degree of risk and are volatile instruments. Past performance is not indicative of future performances. Securities or financial instruments mentioned in the Publication note may not be suitable for all investors and FNB Stockbroking and Portfolio Management (Pty) Ltd has bares no responsibility whatsoever arising from or as a consequence hereof. The material is not intended as a complete analysis of every material fact regarding any share, instrument, sector, region, market, country, investment, or strategy. The recipient of this Publication must make their own investment decision and is advised to contact his relationship manager for a personal financial analysis prior to making any investment decisions. Copyright 2018 by FNB Stockbroking and Portfolio Management (Pty) Ltd.
