Metcash has been under pressure for the past 12-months with softer earnings forcing them to downgrade FY25 guidance, now with 2-months of trading to go before they wrap up their fiscal year at the end of April. We have no specific update on MTS, other than to reiterate that it remains our preferred “value for money” exposure to Australian consumer spending and sentiment. The alternatives are significantly more expensive and we see medium-term upside for MTS, driven by hardware’s exposure to a housing recovery.
- The valuation is attractive (Est P/E ~12.8x) and a projected yield of 7.5% fully franked which gives over 10% gross, with food and liquor offering stability while awaiting a hardware rebound.
MM remains bullish on MTS ~$3.20 for income
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