Update shared on 12 Nov 2025
Fair value Decreased 4.90%Analysts have lowered their fair value estimate for Mr Price Group from ZAR 316.95 to ZAR 301.42. This reflects more cautious assumptions on revenue growth and profit margins, despite recent positive outlooks for the company.
Analyst Commentary
Recent research updates reflect a mix of optimism and caution regarding Mr Price Group’s outlook. Analysts have highlighted several factors influencing the updated fair value estimates and investment recommendations.
Bullish Takeaways
- Bullish analysts cite improved operational execution and stronger-than-expected performance in recent trading periods as reasons for upgrading views on the company.
- There is confidence in Mr Price Group’s ability to maintain share gains in its core markets. This is supported by effective management of inventory and cost controls.
- Some analysts point to healthy cash flows and resilient balance sheet strength. These are seen as supportive of future dividends and reinvestment initiatives.
- Valuation has become increasingly attractive following recent price adjustments. Some believe this creates a favorable entry point for long-term investors.
Bearish Takeaways
- Bearish analysts are cautious about the sustainability of recent growth and note that a more challenging macroeconomic environment may pressure consumer spending.
- There are concerns that tightening profit margins could limit the company’s capacity to achieve historical levels of earnings expansion.
- Uncertainty surrounding potential cost increases, particularly those related to supply chain headwinds, remains a key risk to future profitability.
- Despite operational improvements, some believe the pace of revenue growth may not meet previous expectations. This reflects a more measured approach to forward guidance.
Valuation Changes
- Fair Value Estimate: Lowered from ZAR 316.95 to ZAR 301.42. This reflects more cautious expectations.
- Discount Rate: Reduced marginally from 19.98% to 19.78%.
- Revenue Growth: Revised downward from 7.28% to 6.63% per year.
- Net Profit Margin: Slightly decreased from 10.19% to 10.17%.
- Future P/E Ratio: Lowered from 27.48x to 26.55x, which indicates a slightly less optimistic earnings outlook.
Disclaimer
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