JSE Top 40 Retail Shares: broker ratings, price targets and trading view
The below article looks at JSE Top 40 retail counters, their broker ratings, price targets as well as technical trading considerations within the sector.
JSE TOP40 Retail Shares – Broker ratings and long term price targets
The table below highlights how JSE Top40 retail counters are currently viewed at an institutional (analyst) level.
The table highlights current analyst ratings and long term price targets (as polled by Refinitiv), relative to current prices, assuming a discount or premium to longer term valuations. The ratings and aggregated snapshots of these views on the respective shares are as of the 30th of June 2021.
| Company | LT Broker Rating | LT Target Price | Share Price | Discount / Premium to Target |
| Clicks Group Ltd | HOLD | 270 | 245.59 | -9.04% |
| Dis-Chem Pharmacies Limited | BUY | 31.22 | 32.23 | 3.24% |
| Foschini Group Ltd | BUY | 148.4 | 160.61 | 8.23% |
| Mr Price Group Ltd | HOLD | 226.7 | 213.77 | -5.70% |
| Truworths International Ltd | HOLD | 54.35 | 58.15 | 6.99% |
| Woolworths Group Limited | HOLD | 53.53 | 54.04 | 0.95% |
| Shoprite Holdings Ltd | BUY | 161.9 | 144.42 | -10.80% |
| Pick n Pay Stores Ltd | BUY | 62.14 | 52.68 | -15.22% |
| Spar Group Ltd | BUY | 224.44 | 180.45 | -19.60% |
Dis-Chem, Foschini, Shoprite and Pick n Pay remain in investor favour, all maintaining an average analyst rating of ‘buy’, while Clicks, Mr Price, Truworths and Woolworths maintain ‘hold’ ratings in aggregate.
Dis-Chem, Foschini, Truworths and Woolworths all currently trade at a premium to a consensus of long term analyst price targets.
Food retailers SPAR, Pick n Pay and Shoprite currently trade at the largest discounts to the consensus of long term analyst price targets.
The SPAR Group
The share price of Spar Group Ltd continues to trade within a broad range. Recently we have seen a bullish price reversal at the 17825 support level of this range. The bullish reversal is supported by the Stochastic moving out of oversold territory. 18970 provides the initial upside target from the move, while a close below the 17115 level would instead suggest the bullish reversal to have failed.
Pick n Pay
Similarly to the SPAR chart, we have seen a bullish price reversal at the 4995 support level for Pick n Pay Stores Ltd. The bullish reversal is supported by the Stochastic moving out of oversold territory. 5580 provides the initial upside target from the move, while a close below the 4995 level would instead suggest the bullish reversal to have failed.
Truworths International vs The Foschini Group (long term pair trade)
The pair considers a Long Truworths International Ltd position against a Short Foschini Group Ltd position. The net result of these combined trades looks for a 11.5% profit margin. A stop loss is considered of equal proportion to the expected gain.
A successful pair trade can be realized 1 of 3 ways:
1. The long position rises while the short position falls
2. The long position rises faster than the short position rises
3. The short position falls faster than the long position falls.
The blue line on the chart represents the Truworths / Foschini ratio which recently traded more than 2 standard deviations below the mean (middle line). In turn a successful trade would require the ratio (blue line) to return back to the mean to meet the guided 11.5% profit target.
In summary
- Dis-Chem, Foschini, Shoprite and Pick n Pay all maintain an average analyst rating of ‘buy’
- Dis-Chem, Foschini, Truworths and Woolworths all currently trade at a premium to a consensus of long term analyst price targets
- Clicks, Mr Price, Truworths and Woolworths maintain ‘hold’ ratings in aggregate
- Food retailers SPAR, Pick n Pay and Shoprite currently trade at the largest discounts to the consensus of long term analyst price targets
- The SPAR Group and Pick n Pay have recently produced bullish price reversals at support
- Truworths currently trades at a discount to the mean of its share price relationship with Foschini
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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