Peet Serfontein & Motheo Tlhagale
We initiate a long position. Our upside target is set at R125. We recommend a stop-loss at R106.
AVI is a South African-based company focusing on the branded consumer products industry. Its key competencies are the marketing, processing, and manufacturing of food, beverages, footwear, and cosmetics. Brands include Bakers, Yardley, Willards, Five Roses, Lacoste, and many others.
AVI is a best-in-class food producer, which has proved to be less cyclical than its peers thanks to a less commoditised product, strong ownership of categories and quality brands. The company demands a higher valuation than its peers due to its high operating margin, a superior return on equity, strong management and attractive dividend yield.
Looking at the relative-performance positioning, AVI is outperforming weaker peers while still lagging the sector leader, which indicates ongoing capital support with further catch-up potential. This makes the share an interesting candidate for a long position.
Technically, the formation of a Wave 1 trough (see the insert on the main chart) according to Elliott Wave price theory suggests that the bullish support is accumulating- price is establishing a higher low, reinforcing trend integrity and risk-defined support.
Upside momentum according to the Moving Average Convergence Divergence (MACD) histogram supports the bullish bias.
We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R111.
| Share Information | |
|---|---|
| Share Code | AVI |
| Industry | Food, Beverage & Tobacco |
| Market Capital (ZAR) | 38 billion |
| One Year Total Return | 22.66% |
| Return Year-to-Date | 5.48% |
| Current Price (ZAR) | 111.28 |
| 52 Week High (ZAR) | 112.00 |
| 52 Week Low (ZAR) | 79.30 |
| Financial Year End | June |
| The company's beta of 0.79 indicates that its share price generally moves less than the broader market. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY25 | FY26E | FY27E | FY28E | |
| Headline Earnings per Share (ZAR) | 7.18 | 8.00 | 8.63 | 9.17 |
| Growth (%) | 11.47 | 7.84 | 6.33 | |
| Dividend Per Share (ZAR) | 10.32 | 6.95 | 7.52 | 205.99 |
| Growth (%) | -32.67 | 8.20 | 2639.92 | |
| Forward PE (times) | 13.91 | 12.90 | 12.13 | |
| Forward Dividend Yield (%) | 6.24 | 6.76 | 185.11 | |
| Market forecasts imply that AVI can deliver solid earnings growth over the medium term, with improved operational cost management expected to be the primary driver of that growth. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view:
| Share Name and Position | VOD SA- Take Profit (Close the position) |
ANH SA- Take Profit (Close the position) |
PHP SA- Buy (Continue to hold) |
BTI SA- Buy (Continue to hold) |
|---|---|---|---|---|
| Entry | 132.90 | 1 031.56 | 27.73 | 944.40 |
| Current Price | 153.95 | 1 218.91 | 26.17 | 1 003.67 |
| Movement | +15.8% | +18.2% | -5.6% | +6.3% |
| Comment | Approaching a time-based exit, hence we suggest closing the position. | We suggest taking profit and closing the position. |
A developing symmetrical triangle remains in focus, with the price testing the 200-day simple moving average. Muted downside momentum supports the trade. The profit target remains R30.70, with a trailing stop-loss at R26.25. |
A developing bullish pennant remains in focus, with the price holding above its 200-day simple moving average. Fading downside momentum supports the trade. The profit target remains R1 042.00, with a trailing stop-loss at R978.00. |
| Time to exit | 11 February 2026 | 17 February 2026 | 27 April 2026 | 6 April 2026 |
| Share Name and Position | QLT SA- Buy (Continue to hold) |
MTM SA- Buy (Continue to hold) |
SHP SA- Buy (Continue to hold) |
SLM SA- Buy (Continue to hold) |
|---|---|---|---|---|
| Entry | 41.94 | 36.80 | 271.74 | 94.83 |
| Current Price | 41.20 | 38.36 | 264.03 | 100.73 |
| Movement | -1.8% | +4.2% | -2.8% | +6.2% |
| Comment |
The positive alignment of trend, momentum and market regime remains constructive, with the price holding above its 200-day simple moving average. Emerging downside momentum is a concern. The profit target remains R46.20, with a trailing stop-loss at R39.85. |
A stable pattern of rising troughs and recurring upward impulses remains constructive, with the price holding above its 200-day simple moving average. Fading upside momentum is a concern. The profit target remains R42.00, with a trailing stop-loss at R35.00. |
Price action near the lower range of an upward-sloping linear regression channel remains of interest. Trading below the 200-day simple moving average, the setup is regarded as a counter-trend strategy. The profit target remains R307.00, with a trailing stop-loss at R262.00. |
Based on its historical tendency for strong follow-through after recovery phases and an improving return profile, upside potential into 2026 remains favourable. The price is holding above its 200-day simple moving average. The profit target remains R110.00, with a trailing stop-loss at R97.60. |
| Time to exit | 23 March 2026 | 22 June 2026 | 11 March 2026 | 24 February 2026 |
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