BUZZ - Morningstar says JB Hi-Fi stock in Australia is overvalued, shares drop in response

November 2 - ** Australia’s JB Hi-Fi (JBH.AX) shares fell as much as 1% to A$72.155

** Morningstar said JB Hi-Fi shares are overvalued and maintains its fair value estimate at A$58 per share

** Morningstar stated it now expects profit margins to decline by fiscal year 2027, aligning with a short-term drop in sales

** The investment research firm stated that, for Morningstar’s valuation to match the current share price, pre-tax profit margins need to average 7.2% over the next decade

** Morningstar added there’s little likelihood for margin expansion driven by sales growth, expecting long-term pre-tax margins to stabilize at fiscal year 2027 levels

** Out of 14 analysts, 7 rate the stock “buy” or higher, 5 rate it “hold”, and 2 rate it “sell”; the median target price is A$78.50 — Refinitiv data

** The stock is down 24.7% so far this year

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