Myer Holdings Ltd (ASX: MYR) is heading into FY26 with a firmer trading backdrop and clearer earnings trajectory, according to Morgan Stanley analysts Julia M de Sterke, Melinda K Baxter and Mac Ross.
For the first 19 weeks of the financial year, Myer’s retail sales rose 3.4%, cycling softer conditions but still coming in ahead of internal expectations. Apparel brands also outperformed prior guidance, with sales up 1.3% after earlier indications the category would decline. Morgan Stanley said the combined result underpins the likelihood of an uplift to FY26 earnings before interest, taxes, depreciation and amortisation (EBITDA) forecasts.
Operating cost guidance has been set at about 29% of sales for FY26. The analysts see this as an improvement on the 29–30% range flagged for the second half of FY25, arguing that tighter cost control through peak trading is reinforcing the earnings recovery.
Morgan Stanley also pointed to ongoing progress on supply chain initiatives, including planning work for a long-term national distribution centre.
Governance settings are set to change in April, when billionaire Solomon Lew joins the Myer board.
The broker has maintained its overweight rating on the stock and a $0.69 price target, noting that Myer enters the next stage of FY26 with improving sales momentum, firmer cost discipline and what it views as a more straightforward path to earnings growth.
On the market, Myer shares are currently (midday) trading about 3.33% higher around $0.465.