Harvey Norman Receives BUY Ratings with Up to 20% Upside, 1H25 Profit Jumps 42%

Sonal Goyal

22 July 2025 06:38 PM AEST

Harvey Norman Receives BUY Ratings with Up to 20% Upside, 1H25 Profit Jumps 42%

You are reading a free article with opinions that may differ from the recommendation given by Kalkine in its paid research reports. Become a Kalkine member today to get access to our research reports, in-depth technical and fundamental research. Learn more

Start Your Free Trial Now!

Highlights

Analysts project up to 20.35% upside, with target prices ranging from AUD 5.90 to AUD 6.80.

Harvey Norman posted a 41.2% YoY increase in 1H25 profit before tax, reaching AUD 400.29 million.

Harvey Norman Holdings Ltd (ASX:HVN), a major player in the Australian retail and property sector, has received positive outlooks from several leading research firms following the release of its first-half results for the financial year 2025 (1H25). Analysts from Macquarie, E&P, and Bell Potter have reiterated BUY or equivalent recommendations, forecasting share price gains of up to 20.35% from current levels.

As of 22 July 2025, the stock trades at AUD 5.65, while analyst targets range from AUD 5.90 (Macquarie) to AUD 6.80 (E&P). Bell Potter also maintains a BUY recommendation, with a target of AUD 6.00, implying a 6.19% upside.

Record Profit and Franchise Growth in 1H25

The company reported a 41.2% year-on-year rise in profit before tax (PBT) to AUD 400.29 million, up AUD 116.71 million from 1H24. Excluding property revaluations and lease impacts, underlying profit for the half reached AUD 310.46 million, reflecting a 2.2% increase.

Franchising operations delivered a standout performance, with PBT of AUD 180.28 million, rising 26.0% from the prior year. This was driven by franchise fees and revenue growth across its Australian network. Franchisee sales rose 5.5%, and margins improved to 5.40% compared to 4.52% in 1H24.

Property and Cash Bolster Valuation

Harvey Norman's property division contributed significantly to earnings, recording AUD 165.81 million in PBT, up 135.6% year-on-year, primarily from a property revaluation increment of AUD 84.71 million. The group’s freehold property portfolio now stands at AUD 4.39 billion.

The group also reported operating cash flows of AUD 448.10 million and maintained a cash conversion ratio of 118.8%. The cash position supported a net assets base of AUD 4.72 billion, with a conservative net debt to equity ratio of 12.01%. These metrics demonstrate Harvey Norman’s ongoing financial discipline and capacity to deliver shareholder value.

Overseas Segment Challenges and Outlook

Despite macroeconomic headwinds, particularly in New Zealand and parts of Europe, Harvey Norman remains committed to international expansion. Though overseas retail PBT declined by AUD 8.29 million to AUD 67.89 million, the company is investing in new UK store formats and continues to enhance its digital capabilities.

Management highlighted the company's progress in integrating Gen-AI and APC technologies to elevate customer experience. These advancements are expected to support continued growth across categories like home appliances, furniture, and consumer electronics.

Dividend and Shareholder Returns

The Board declared a fully-franked interim dividend of AUD 12.0 cents per share, which was paid on 1 May 2025.

Download Free Report – Explore 3 Stock Ideas & Industry Insights

Unlock 3 stock ideas and key industry insights in our free report. This information is general in nature and does not consider your personal objectives, financial situation, or needs. It is not financial advice.

All investments involve risk—consider independent advice before making any investment decisions.

View 3 Research Reports

Disclaimer:

This article (“Article”) has been prepared by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and its related bodies corporate who are authorised to provide general financial product advice. Kalkine.com.au and its associated pages are published by Kalkine.

Any information/advice provided in this article is general in nature and does not take into account your objectives, financial situation or needs. You should therefore consider whether the information is appropriate for your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Memorandum or other offer document (“Offer Document”) for the securities or other financial products referred to in Kalkine articles. You should obtain a copy of the Offer Document and consider it before making any decision about whether to acquire the security or financial product.

Kalkine strongly recommends that you seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) before acting on any advice/information in this Article or on the Kalkine website. Not all investments are appropriate for all people.

The information in this Article and on Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of the information contained in its articles (including this Article), newsletters and websites. All information represents our views at the date of publication and may change without notice.

The information in this Article does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products.

Kalkine does not issue, sell or deal in any financial products.

This Article may contain information on past performance of particular investments. Please note past performance is neither an indicator nor a guarantee of future performance.

To the extent permitted by law, and excluding any dishonesty or gross negligence by Kalkine, Kalkine disclaims and excludes all liability for any direct, indirect, implied, punitive, special, incidental or other consequential loss or damage arising from the use of or reliance on this Article, the Kalkine website and any information published on the Kalkine website without any warranties or representations by Kalkine to you. To the extent the law prohibits or limits this exclusion, Kalkine limits its liability to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this Article or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.

Some of the images/music that may be used in the Article are copyright to their respective owner(s). Kalkine does not claim ownership of any of the pictures displayed/music used in the Article unless stated otherwise. The images/music that may be used in the Article are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.