Europris (Buy, TP: NOK36.00) - Time to fix with pick and mix
Europris’s share price has fallen 30% in the past six months on the back of a weaker than expected sales trend and lack of operational leverage. We believe the Q1 results (due on 19 April at 07:00 CET) are unlikely to show any meaningful signs of improvement in the operational leverage, but we expect LFL growth to be back in the black. We reiterate our BUY recommendation and NOK36 target price, as we still find the stock attractively valued at a 2018e P/E of 10x.Europris ASA is a Norway-based discount retailer. The Company offers a broad assortment of brand name merchandise and own labels. Its offering is divided in 12 product categories: Home & Kitchen, Groceries, House & Garden, Electronics, Personal Care, Clothes & Shoes, Handyman, Hobby & Office, Candy & Chocolate, Laundry & Cleaning, Pets, and Travel, Leisure & Sport. The Europris chain comprises more than 220 stores across Norway. Its business model is based on direct ownership and franchise.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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