The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
The headline FY net income came in at $98.5 million – below estimates of $101.4 million. However, there were some positives, with sales relatively in line with estimates while the $0.055 dividend was slightly ahead.
Like other retailers, MYR’s gross profit margin picture continues to deteriorate along with declining sales growth. As a result, MYR was reluctant to provide guidance, but anticipates modest growth in sales and margins.
Regardless, the market was happy to sell MYR off today – we saw a sharp drop at the open, resulting in a big gap. MYR extended its losses into double digit territory, with investors reluctant to catch it at lower levels.
The stock has been in a downtrend since March, taking it all the way down to $1.97 in June. After experiencing a stellar recovery heading into its results, it seems the stock is back to square one. MYR is testing the 61.8% retracement of the June-to-September rise at $2.18.
A close below this level would leave MYR vulnerable to a move towards the $2 mark in the near term. Should $2.18 hold and we see a couple of positive days, then investors could perhaps look to take advantage of the price weakness.