@Karmast here's my valuation work on JBH. can see possibly over earning. will it under earn in future? deep recession yes , otherwise maybe flattens grwoth profile.

you cna see the scenario analysis below under different growth and PE assumptions. look alright under a soft landing. needs earnings to go backwards to undermine valuation.

maybe i will add that scenario :)

I think you make some great points @Karmast

The PEs of cyclical stocks can be deceptive, in that they look low on the basis of past earnings, but could be much higher on a forward basis. But in this case, even if you assume a pretty substantial decline in per share earnings the PE is hardly demanding. Especially if they can sustain decent growth across the full cycle.

For example, consensus guidance for FY24 EPS is $3.52, a good 24% below the expected result this year. But even on that basis, the forward PE is something like 12.8. Consensus estimates for FY24 dividend is $2.30 which gives a forward yield of 5%, or 7.2% grossed up for franking credits. Who knows what happens in terms of market sentiment in the short to medium term, but that's a pretty decent yield for those happy to ride the ups and downs of market pricing.

And, of course, when shoppers again start to open up their wallets, it's not a stretch to imagine they could return to FY22 EPS levels, and beyond, in the years ahead.