Pick n Pay Stores Ltd. rose for a sixth consecutive day to a record as earnings due to be published later this month are expected to show an improved performance by the South African supermarket chain.
The shares climbed 1.7 percent to 71.79 rand by the close in Johannesburg for their longest winning streak since the six days ended Nov. 24. The FTSE/JSE Africa General Retailers Index advanced 1.2 percent to the highest since Dec. 31., a fourth straight day of gains.
“My gut feel is that the market is expecting decent results in the next couple of weeks, so there’s potential for them to surprise on the upside and beat consensus,” Kyle Rollinson, an analyst at Avior Capital Markets, who has an “underperform” rating on the stock, said by phone on Monday. The strengthening rand, which rose against the dollar for four days through Friday, will probably generate positive sentiment among consumers, he said.
Pick n Pay has been battling depressed consumer confidence in South Africa as rising inflation increases the cost of food and economic growth slows. In October, the Cape Town-based company reported first-half earnings that missed estimates and said trading conditions would remain difficult.
The stock has three buy ratings, nine holds and four sells, according to data compiled by Bloomberg, and is trading above it’s 12-month target price of 62.15 rand. Pick n Pay is expected to announce full-year earnings on April 26.