Which JSE listed retail sector shares are best right now?
The following compares JSE listed retail companies: Clicks, Dis-Chem, Mr Price, The Foschini Group, Truworths, Woolworths, Pick ‘n Pay, Shoprite and Spar in terms of total returns, broker ratings and peer valuations.
Total returns
The following table highlights total returns for locally listed retail counters over a one month, three month and year to date look back period. Total returns reflect capital gains and dividends paid over the respective periods.
The retail sector has underperformed in 2023 as high inflation, a weak rand, rising interest rates and a generally poor consumer climate has weighed on sentiment.
The Spar Group has however bucked the general sector trend outperforming its fellow food retail peers as well as broader apparel counters, having gained more than 25% year to date. It should however be noted that the share price of Spar did start the year off around lows not seen since 2014 after significantly underperforming its peers in 2022.
Pick ‘n Pay Stores finds itself the worst performing retail stock for the year to date, although has started to outperform its peers over the last month as the share rebounds from oversold levels.
Woolworths is the worst performing retail counter over the last month, being the only stock to have produced a negative total return over this period.
Retail shares price targets and broker ratings
The below table shows locally listed retail counters, highlighting long term price targets and broker ratings as of the 25th of April 2023, sourced from Refinitiv Workspace.
The Foschini Group is the only security (of those covered in this commentary) to carry a consensus buy rating.
Clicks, Dis-Chem, Mr Price, Truworths, Pick ‘n Pay, Shoprite and Spar all carry consensus buy ratings.
Woolworths is the only retail security covered a consensus hold rating.
While all these retailers currently trade at significant discounts to longer term fair value assumptions, the Foschini Group currently trades at the steepest discount to its long-term median price target.
Peer valuation
Truworths International has the lowest historic and forward-looking price to earnings (P/E), whilst also having the highest dividend yield.
The Foschini Group, Mr Price Group, Woolworths and the Spar Group all currently trade at a discount to the trailing and forward P/E peer average.
The Clicks Group has the highest historic and forward-looking P/E multiple, followed by Dis-Chem Pharmacies.
Dis-Chem currently has the lowest historic dividend yield of the securities covered.
The Foschini Group, Mr Price Group, Truworths, Pick ‘n Pay, and Woolworths all have higher historical dividend yields than the peer average.
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