JBH has slipped over 5% from its recent all-time high, with the local retail sector feeling vulnerable short-term as a potential funding vehicle to address the large underweights held by fund managers towards resources – the Consumer Discretionary Sector is still up +16.8% year-to-date. We also saw disappointing earnings from Premier Investments (PMV) leading to a 9% drop in the shares, casting a slight shadow over the sector; markets are still looking for four rate cuts by the RBA over the next year, but the consumer is struggling and if they take too long the recovery may be slower than people are anticipating.
- We still believe JBH is rich, trading at a ~30% premium to its longer-term valuation, but it’s a quality operator that MM would certainly love to re-enter at the right price.