Nick Scali has basically halved in 2026 with Januarys result delivering most of the losses, discussed here. At the time their 1H result was a healthy beat but they set the scene for retail as it was accompanied by a cautious outlook – on the money in hindsight. However, this is a great business that’s expanding well across the UK, and it’s noticeable that its downside momentum is slowing, even as global bond yields surge higher.
The stock is now trading around one standard deviation below its historical valuation range, while also offering an attractive ~5.7% fully franked yield. Clearly, the stock is at the mercy of the consumer, but a lot of bad news is already built into the sector, and when sentiment turns, NCK will be one of the leaders, in our opinion.
- We see great valuation and risk/reward in Nick Scali below $14.
MM is long and bullish on NCK below $14
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