Myer Holdings Limited (ASX: MYR)

MYR was incorporated in 2006, it consists of 60 department stores along with an online business in Australia. It is involved in offering womenswear, menswear, childrenswear, beauty, homewares, electrical goods, toys and general merchandise. MYR holds a market capitalization of AUD 414.74 million as of 12^th November 2021.

Financial and Operational Updates: As per the news mentioned by Theage.com.au on 10^th November 2021, a prospective legal suit is expected to be implied against MYR by Vicinity Centres with respect to a non-payment of rent from May to October 2021 period totalling ~AUD 4.2 million. As per the announcement on ASX, MUFG (on 18^th October) and First Sentier Investors Holdings Pty Ltd (on 15^th October) became substantial shareholder in MYR. As per the Annual Report for FY21 released on 5^th October 2021, revenue from online sales increased ~27.7% Y-o-Y to ~AUD 539.5 million in FY21, representing ~20.3% of total Sales. Its EBITDA increased by ~117% to ~AUD 170.5 million in FY201, where implementation costs and implementation costs and significant items (post tax) were ~AUD 5.3 million. Cash at the end of FY21 was reported at ~AUD 178.6 million as of 30^th June 2021 versus ~AUD 86.5 million in PcP.

Technical Analysis: On the daily chart, MYR stock price witnessed a breakout of the rising trendline support at AUD 0.53 level and sustaining below the same. Moreover, the prices are trading below the trend-following indicators 21-period SMA and 50-period SMA, indicating a negative momentum. The momentum oscillator RSI (14-period) is trading at ~41.93 level, indicating negative momentum.

After considering the potential contingent legal proceedings and the ~70.00% return it has given in past six months, we consider it is prudent to “Sell” this stock at the current price of AUD 0.515 per share as of 12^th November 2021, 01:10 PM (GMT+10), Sydney, Eastern Australia.

Daily Technical Chart – MYR

Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

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