“What gives you opportunities is other people doing dumb...

“What gives you opportunities is other people doing dumb things,” the “Oracle of Omaha” said at Berkshire Hathaway’s annual shareholder’s meeting 2023.

Buffett thinks opportunities will present themselves to value investors given the short-term view of so many people in today’s society.

Value investing typically refers to buying undervalued stocks or businesses when others are selling them at a discount and then holding them for the long term.

You can factor in all the bulls#@t you want in the short term but the reality is, this is well oversold imho and purely based on technical analysis and not fundamental analysis at current levels. Managed to average down significantly and still reckon this one is a long term winner for strong hands. The intrinsic value of the business is worth much more than the current share price. Funny thing is investors are willing to pay ridiculous multiples to many asx listed companies who continue to trade at inflated levels and many of those listed companies are in the asx 100. lol. Research will be rewarded and good luck to all holders.

Some broker view below in the shorter term.

Jun 08, 2023

ADH ADAIRS LIMITED
Furniture & Renovation – Overnight Price: $1.42

Jarden rates ((ADH)) as Overweight (2) –

Adairs has reduced earnings guidance by -15% at the mid point as trading softened throughout April and into May. Management has pointed to gross margins being in line with expectations and higher than the prior corresponding second half.

Jarden envisages growing risks into FY24 because of increased promotional intensity and a falling Australian dollar.

While Adairs is likely to try and cut costs in a slowing environment, the decision on wages by the Fair Work Commission, coupled with rising energy and rent costs, is likely to create significant headwinds.

Yet Jarden maintains an Overweight rating on valuation grounds while reducing the target to $2.05 from $3.00.

This report was published on June 2, 2023.

Target price is $2.05 Current Price is $1.42 Difference: $0.63
If ADH meets the Jarden target it will return approximately 44% (excluding dividends, fees and charges).
Current consensus price target is $1.72, suggesting upside of 23.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:Jarden forecasts a full year FY23 dividend of 15.00 cents and EPS of 24.10 cents.At the last closing share price the estimated dividend yield is 10.56%.At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.89.How do these forecasts compare to market consensus projections?Current consensus EPS estimate is 22.2, implying annual growth of -15.8%.Current consensus DPS estimate is 14.3, implying a prospective dividend yield of 10.3%.Current consensus EPS estimate suggests the PER is 6.3.

Forecast for FY24:Jarden forecasts a full year FY24 dividend of 16.00 cents and EPS of 24.30 cents.At the last closing share price the estimated dividend yield is 11.27%.At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.84.How do these forecasts compare to market consensus projections?Current consensus EPS estimate is 19.2, implying annual growth of -13.5%.Current consensus DPS estimate is 14.0, implying a prospective dividend yield of 10.1%.Current consensus EPS estimate suggests the PER is 7.2.

Morgans - 05/06/2023HoldTarget: $1.80Gain to target$0.19

After a big share price fall following a material cut to FY23 guidance by Adairs, Morgans retains its Hold rating despite a very attractive dividend yield, due to the volatility and unpredictability of near-term earnings.

Guidance for sales was reduced to $616-622m from $625-665m, while earnings (EBIT) guidance is now expected to be in the range of $62-65m, down from $70-80m.

The highly discretionary nature of the homewares category further amplifies the apparent recent capitulation of the consumer, notes the analyst.

The target is reduced to $1.80 from $2.60.

Target price : $1.80 Price : $1.61 (05/06/2023) Gain to target $0.1911.80%

(excluding dividends, fees and charges - negative figures indicate an expected loss).

UBS - 05/06/2023Downgrade to Neutral from BuyTarget: $1.65Gain to target$0.04

Adairs has cut FY23 sales guidance by -4% and EBIT by -15%. The drivers of the downgrade were the core Adairs brand and Focus, with the latter surprising UBS given recent upbeat commentary from management about the outlook and potential as a "trade-down" beneficiary.

UBS reassesses top-line and cost assumptions from FY24 and reduces EPS estimates by -36%, cutting FY25 by -28%. The visibility into FY24 across the brands remains challenging, given the consumer backdrop and recent execution issues.

UBS downgrades to Neutral from Buy and reduces the target to $1.65 from $2.95.

Target price : $1.65 Price : $1.61 (05/06/2023) Gain to target $0.042.48%

(excluding dividends, fees and charges - negative figures indicate an expected loss).

Ord Minnett - 05/06/2023HoldTarget: $1.70Gain to target$0.09

Adairs has downgraded sales and profit guidance for FY23. Sales are expected to be in the range of $616-622m, -4% lower than the mid point of prior guidance.

Ord Minnett notes the impact of rising interest rates and higher cost of living has meant declining household goods expenditure, with traffic lower in both stores and online.

The broker expects trading conditions will deteriorate in the short term and retains a Hold rating, reducing the target to $1.70 from $2.40.

Target price : $1.70 Price : $1.61 (05/06/2023) Gain to target $0.095.59%

(excluding dividends, fees and charges - negative figures indicate an expected loss).

Jarden forecasts a full year FY24 dividend of 16.00 cents and EPS of 24.30 cents.
At the last closing share price the estimated dividend yield is 11.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.2, implying annual growth of -13.5%.
Current consensus DPS estimate is 14.0, implying a prospective dividend yield of 10.1%.
Current consensus EPS estimate suggests the PER is 7.2.