Our thoughts on Nick Scali Ltd (NCK) around $10
Hi James and team, please can you comment on MM's thinking on NCK at current pricing. Thanks, Jan P.
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Answer
Hi Jan,
NCK is a quality operator which has thrived in the post COVID environment where Australians have spent big on their home and contents. Tuesdays trading update didn’t go down too well with the market even though it showed revenue growth well above 40%, either the market was too optimistic or we had a classic case of “buy on rumour & sell on fact”.
We discussed SUL and retail more generally in the AM note on Wednesday (click here). The issue now becoming obvious in retail is a result of the very strong sales achieved through COVID, and the high bar this now sets for the sector on a comparative basis. MM are now becoming more cautious on retail generally. We’d only become interested in NCK nearer~$8.50.
