Sequential Rise in Household Expenditure Unveiled Growth Prospects for Retailing & Consumer Discretionary Sector

Sector Landscape

Retail Trade Illustrating Consequent Growth

Index Performance

Key Risks and Challenges

Outlook

Investment theme and stocks under discussion (ALL, ARB)

After understanding the sector, let us now look at two companies listed on the ASX. The price potential of the companies under discussion has been analysed based on the ‘EV/EBITDA’ multiple method.

1.  ASX: ALL (Aristocrat Leisure Limited)

(Recommendation: Speculative Buy, Upside Potential: Low Double-Digit, Mcap: AUD 22.45bn)

Company Overview: ALL is an Australia-based gaming technology and content company. ALL holds two operating units, namely, Aristocrat Gaming & Pixel United 

2.  ASX: ARB (ARB Corporation Limited)

(Recommendation: Speculative Buy, Upside Potential: Low Double-Digit, Mcap: AUD 2.25bn)

Company Overview: ARB is engaged in the business of designing, manufacturing, distributing, and sale of motor vehicle accessories & light metal engineering works 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is not a reliable indicator of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 13^th October 2022. The reference data in this report has been partly sourced from REFINITIV. 

Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above. 

Technical Indicators Defined: - 

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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