By Peet Serfontein & Jalpa Bhoolia
We initiate a long position. Our upside target is set at R167. We recommend a stop-loss at R132.
The Foschini Group is an investment holding company with a core business focus in retail and financial services. The group comprises several brands trading throughout southern Africa offering a prominent lifestyle range of household name brands including Foschini, @Home, Sterns, Totalsports, Sportscene and Jet, among others. The group also owns Phase Eight and Whistles in the United Kingdom, and RAG in Australia.
Fundamentally, the company is the market leader locally in 'quick response' and has the design and manufacturing capability to lead the market from a stock perspective. Geographic, product, and diversification across target markets adds a defensive component to the business. This company, along with its discretionary retail peers, could benefit from easier consumer conditions near term.
Technically, a trough in the price according to the Elliott wave analysis makes for an appealing investment opportunity (see the insert on the main chart).
In this pattern, a trough represents the end of a corrective phase and the potential start of a new impulsive wave. Looking at Trough 16 in the chart, this point could mark the completion of a corrective wave, suggesting that selling pressure has subsided and buyers may regain control. If the price confirms a higher low relative to previous troughs, it further reinforces the bullish structure.
The price is in the Accumulation phase of the Wykoff Price Cycle, supporting a bullish stance. This phase is typically characterised by decreasing selling pressure, higher lows, and increased volume on up-moves, signalling growing demand.
We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R147.
| Share Information | |
|---|---|
| Share Code | TFG |
| Industry | Consumer Discretionary |
| Market Capital (ZAR) | 46.49 billion |
| One Year Total Return | 28.90% |
| Return Year-to-Date | -16.40% |
| Current Price (ZAR) | 140.44 |
| 52 Week High (ZAR) | 178.67 |
| 52 Week Low (ZAR) | 91.11 |
| Financial Year End | March |
| The share recently tested its 200-day simple moving average - a major support level. Expect moderate volatility in the share price. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (ZAR) | 9.65 | 10.47 | 12.36 | 14.42 |
| Growth (%) | 8.58 | 18.01 | 16.68 | |
| Dividend Per Share (ZAR) | 3.50 | 3.88 | 4.57 | 5.65 |
| Growth (%) | 10.71 | 17.81 | 23.72 | |
| Forward PE (times) | 13.41 | 11.36 | 9.74 | |
| Forward Dividend Yield (%) | 2.76 | 3.25 | 4.02 | |
| Earnings is expected to reach double-digit growth in the medium term. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view
| Share Name and Position | NTC - Stop Loss (Close the Position) |
VOD - BUY (Continue to hold) |
STXIND - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 15.49 | 109.87 | 114.97 |
| Current | 13.65 | 120.23 | 120.87 |
| Movement | -11.9% | +9.4 | +5.1% |
| The share triggered a stop-loss, leading us to close the position. Strong downside price momentum is a concern. |
The price volume swing analysis for the share remains of interest. Remains above its 200-day simple moving average. Upside price momentum supports the trade.
Our profit target is R125.00 with a trailing stop-loss at R114.00. Exit the trade on 7 April 2025. |
A price that is developing a trough according to the Elliott wave theory remains of interest. Remains above its 200-day SMA. Fading downside price momentum is a positive.
Our profit target is R127.00 with a trailing stop-loss at R113.00. Exit the trade on 16 February 2025. |
| Share Name and Position | APN - BUY (Continue to hold) |
SHP - Buy (Continue to hold) |
GRT - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 171.38 | 292.78 | 13.22 |
| Current | 168.34 | 280.83 | 12.08 |
| Movement | -1.8% | -4.1% | -8.6% |
|
A price that is testing major support remains of interest. Remains below its 200-day simple moving average, and the trade idea is regarded as a counter-trend strategy. Upside price momentum supports the trade strategy.
Our profit target is R196.00 with a trailing stop-loss at R162.00. Exit the trade on 26 May 2025. |
A price that appears to be in a phase of low volatility remains of interest. Remains below its 200-day simple moving average. Strong downside price momentum is a concern.
Our profit target is at R317.00 with a trailing stop-loss at R268.00. Exit the trade on 1 September 2025. |
A price trading at one of the highest price bins in its price distribution analysis remains of interest. Remains below its 200-day simple moving average. Strong downside price momentum is concerning.
Our profit target is R16 with a trailing stop-loss at R12.00. Exit the trade on 17 November 2025. |
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