Europris (Buy, TP: NOK36.00) - An unconvincing quarter
Europris is attractively positioned in a segment of the retail space which is actually growing. However, the key concern remains whether it can convert this into profit growth. Q4 was unconvincing, with EPS down 7% YOY. Furthermore, near-term improvement looks unlikely with full operating cost benefits from the new warehouse not expected before 2023. We reiterate BUY on valuation, but have cut our target price to NOK36 (40) on lowered estimates.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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