Peet Serfontein & Motheo Tlhagale
We reiterate a long position. Our upside target is set at R307.00. We recommend a stop-loss at R262.00.
Shoprite Holdings is Africa's largest food retailer and offers quality products and exceptional convenience to millions of customers across the continent. The group operates a diverse portfolio of over 3 400 stores under trusted brands such as Shoprite, Checkers, Usave, LiquorShop, and several specialty businesses.
With a robust supply chain and market-leading loyalty programme, the group serves more than 30 million customers annually, and maintains a strong focus on affordability, innovation, and omnichannel retail including the market-leading Sixty60 on-demand delivery service.
Technically, the stock's movement to the lower boundary of an upward-sloping linear regression channel suggests a favourable setup for a long position (see the insert on the main chart). This area often triggers historical buying interest within a broader bullish trend, meaning that recent downside pressure may be absorbed rather than signalling a reversal. If the channel's upward slope persists and market conditions remain supportive, the probability of renewed upward momentum is high.
The market regime analysis for Shoprite indicates a bullish environment, driven primarily by strong momentum, supported by trend strength and neutral but stabilising cyclical factors. These conditions, together with an inclining channel pattern, align with continued upside potential.
Although the Moving Average Convergence Divergence (MACD) histogram reflects ongoing downside momentum, historical patterns suggest that negative phases have been short-lived, with the price stabilising and recovering soon after. This indicates that sellers struggle to sustain control, and diminishing downside impulses may signal underlying resilience and renewed buying interest.
We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R281.00.
| Share Information | |
|---|---|
| Share Code | SHP |
| Industry | Food and Grocery Retail |
| Market Capital (ZAR) | 161.1 billion |
| One Year Total Return | -5.27% |
| Return Year-to-date | -4.86% |
| Current Price (ZAR) | 272.43 |
| 52 Week High (ZAR) | 314.72 |
| 52 Week Low (ZAR) | 234.21 |
| Financial Year End | June |
| The share is trading just below its 200-day simple moving average (SMA) at R277.08, following a recent bullish cross. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY25 | FY26E | FY27E | FY28E | |
| Headline Earnings per Share (ZAR) | 14.27 | 15.66 | 17.40 | 19.37 |
| Growth (%) | 9.76 | 11.10 | 11.37 | |
| Dividend Per Share (ZAR) | 7.81 | 8.89 | 9.90 | 10.99 |
| Growth (%) | 13.79 | 11.44 | 10.96 | |
| Forward PE (times) | 17.40 | 15.66 | 14.06 | |
| Forward Dividend Yield (%) | 3.26 | 3.64 | 4.03 | |
| Medium-term growth prospects remain positive with sustained momentum expected over the next few financial periods. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view:
| Share Name and Position | TKG - Buy (Continue to hold) |
SLM - Buy (Continue to hold) |
HAR - Buy (Continue to hold) |
OUT - Buy (Continue to hold) |
|---|---|---|---|---|
| Entry | 50.50 | 94.83 | 298.99 | 73.75 |
| Current Price | 50.17 | 91.75 | 334.00 | 72.50 |
| Movement | -0.7% | -3.2% | +11.7% | -1.7% |
| Comment | A developing rectangle pattern above the 200-day average supports a constructive setup. With fading downside momentum, we target R60.00 and have set a stop-loss at R47.00. | The share's historical post-recovery strength and improving returns in 2025 support a favourable view for 2026. Although the price remains above the 200-day average, fading momentum is a concern. We target R110.00, with a stop-loss at R89.00. | The impulsive structure of wave b remains constructive, with the share holding above its 200-day average. Strong upside momentum supports the trade. We target R374.00, with a trailing stop-loss at R289.00. | The position is nearing its time-based exit. A shift toward consecutive bullish swings is encouraging, despite a brief dip below the 200-day average. Fading downside momentum supports continuation. We target R87.00, with a stop loss at R69.00. |
| Time to exit | 3 March 2026 | 24 February 2026 | 12 January 2026 | 11 December 2025 |
| Share Name and Position | VOD - Buy (Continue to hold) |
ANH - Buy (Continue to hold) |
CLS - Stop-loss (Close the Position) |
|---|---|---|---|
| Entry | 132.90 | 1 031.56 | 365.58 |
| Current Price | 134.18 | 1 055.80 | 346.29 |
| Movement | +1.0% | +2.3% | -5.3% |
| Comment | A low-volatility phase, potentially signalling stability and accumulation, remains of interest as the price tests its 200-day average. Downside momentum is, however, a concern. We target R157.00, with a trailing stop-loss at R125.00. | Price action remains constructive within the upward-sloping linear regression channel, though trading below the 200-day average confirms a counter-trend setup. Fading upside momentum is a concern. We target R1 255.00, with a trailing stop-loss at R966.00. | The position was closed after a stop-loss was triggered. Persistent and pronounced downside price momentum remains a concern, signalling the potential for further weakness in the share. |
| Time to exit | 11 February 2026 | 17 February 2026 |
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