Europris (Buy, TP: NOK52.00) - It’s a record
Europris’ reported Q2 results were its best ever, reflecting a favourable mix of strong sales supported by Covid-19 effects, improving gross margins, and leverage on fixed costs. Although the tailwind from Covid-19 is set to ease in the coming quarters, we continue to see positive momentum and to find the valuation attractive. At our revised target price of NOK52 (50), Europris is trading at a 2020e P/E of c14x, representing a 35% discount to international discount retailers. We reiterate our BUY.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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