Upside target: R264.00
Recommended stop-loss: R206.00
Peet Serfontein, Tlamelo Ntabeni
The Mr Price Group and its subsidiaries operate over a thousand stores across Southern Africa.
The group consists of eight retail brands, focusing on clothing, footwear, accessories, and homeware. These chains are divided into two operational divisions namely, apparel (Mr Price, Mr Price Sport, Miladys, and Power Fashion) and home (Mr Price Home, Sheet Street, and Yuppiechef).
The company recently acquired local value-focused fashion retailer Power Fashion, and up-market online homeware retailer Yuppiechef. Both acquisitions are expected to be immediately earnings accretive.
In addition, the group launched three new categories in Mr Price Apparel in 2H21, namely, mrpBaby, mrpSchoolgear (uniforms), and mrp&co (novelty and gifting). These new high-growth categories should provide additional market share growth.
The price remains just above its 200-day simple moving average, which classifies the long-term trend as bullish.
RSI forward calculations suggest the share will be overbought at R265, which classifies our target price of R264 as realistic.