What Happened to the JB Hi-Fi Share Price?
Shares in electronics retailer JB Hi-Fi Ltd [ASX:JBH] popped up nearly 2% today. Earlier in the session, the shares were up by almost 4%, putting them close to a monthly high.
Why Did This Happen to the JB Hi-Fi Share Price?
The fortunes of retail stocks are highly linked to expectations around consumer behaviour.
The latest forward-looking consumer confidence figures in the Westpac/Melbourne Institute Leading Index show that the outlook for spending improved in May.
That news has given cheer to a broad range of retail-focussed Australian stocks today.
But there’s also an element of relief in this rally, as the likelihood of JB Hi-Fi issuing a profit warning is decreasing every day. That makes JB Hi-Fi a more attractive bet than retail stocks like Pacific Brands Ltd [ASX:PBG] and The Reject Shop Ltd [ASX:TRS].
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When a company’s listed peers are confessing missed earnings targets, a lack of news can be viewed quite positively. That keeps the share price moving upwards.
What Now For JB Hi-Fi?
JB Hi-Fi is a proven, resilient performer through good times and bad. It offers a reasonable fully franked dividend, growth prospects through its new ‘Home’ format stores and value return through its $27 million share buyback program. You should take any indications that Australians are getting happier to open their wallets as a positive for this stock.
Tim Dohrmann+
Small-Cap Analyst, Australian Small-Cap Investigator
