First half results for KMD Brands were in line with (downgraded) pre-guidance, while sales growth of -3.5% year-on-year for the beginning of H2 was an improvement on the -14.5% in H1.

As the company has missed earnings expectations several times, the broker lacks confidence medium-term targets can be achieved. The near-term outlook for the Kathmandu brand is considered challenging due to past execution issues and a more competitive backdrop.

The Equal-weight rating is retained but the target falls to 55c from 80c. The broker sets a target multiple at a circa -30-40% discount to its five year average. Industry view is In-Line.

Sector: Retailing.

Target price is $0.55.Current Price is $0.49. Difference: $0.06 - (brackets indicate current price is over target). If KMD meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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