Super Retail Group (SUL) : Transitioning to growth.

With the benefit of important business transformation initiatives undertaken over the past two years, and bed-down of execution hick-ups that unfortunately accompanied, we believe SUL is now entering its next earnings growth phase. We are forecasting EPS growth of 18.1%/16.8% in FY16/FY17 driven by the combination of leverage benefits off initiatives recently complete or well advanced (including new DC network, JDA rollout and SAP), the closure of loss-making stores in 2H15 (FCO and 5xRays), cycling of weaker comparatives, and the progressive unwind of investments. Notwithstanding continued pressures stemming from mining, we believe the business will benefit from a number of internal drivers as well as the conducive macro backdrop. We retain our Buy rating with an unchanged 12-month PT of $11.00. Read the full report (VIEW LINK)