Today‘s Morning Meeting: We now call the bottom in SA general retail

研报英文原文证据摘录

Today‘s Morning Meeting: We now call the bottom in SA general retail

CEEMEA Equity Research

CEEMEA First to Market 04 August 2026

Today’s Morning Meeting | Also Published Today | Key Changes | JPM Events | Upcoming Earnings

Today’s Morning Meeting

We now call the bottom in SA general retail (Inga Q Galeni/David Aserkoff, CFA/Shaun Chauke)

SA retailers have priced in upcoming EPS downgrades in our view, further price reaction will be

muted

With General Retailers now among the cheapest sectors on the JSE and price action having moved well ahead of EPS

downgrades, we are calling the bottom and upgrading our UW rating (one of our better calls in a low-conviction year)

to N within our SA Strategy allocation. We would fund this trade by shorting Drug Retailers within the Staples Index while

staying long SHP/BID – both names that appear in our SA Strategy Top Picks. This is despite the weak macro backdrop,

ongoing wallet displacement towards online gambling (R75bn) and the impact of Chinese e-commerce players on price

perception and sector margins (R8.2bn) (see our note). The data support the view that the sell-off has become increasingly

price-driven. Over the past 12 months, SA retailer EPS has contracted by c. 10% while share prices have fallen c. 23%,

implying a punishment ratio of c.2.3x. This also aligns with our roadshow feedback: buy-side expectations have already

been reset materially lower, while sell-side forecasts still appear to lag, with consensus earnings estimates across our

coverage still c. 5% too high versus where investor expectations have moved. On a shorter three-month view, earnings

revisions are essentially flat, yet prices are down c. 4%, reinforcing that the de-rating is now being driven more by multiple

compression than fresh earnings downgrades.