Report
Marios Bourazanis ...
  • Stamatios Draziotis CFA

Fourlis | Clearer story, cheaper stock

New narrative, old skepticism – Following the deconsolidation of Trade Estates, Fourlis now presents a cleaner equity narrative, with the spotlight firmly on the core retail portfolio. However, the deconsolidation seems to have offered limited respite to the shares, which have materially underperformed both foreign peers and Greek non-fins over the past 24 months, reflecting subdued investor appetite, notwithstanding encouraging (albeit not impressive) operational delivery. Weighing on sentiment has been a confluence of factors in our view, including lingering concerns around the extent of positive operating leverage, soft homeware market trends, and the still low market valuation of the REIC (>35% discount to NAV). Although we do concur with the view that this is a “show-me” story, we see the thesis as largely de-risked at current levels, since the retail stub is trading at a mere c6x EV/EBIT, a 15-35% discount vs international peers. We thus reiterate our Buy rating, with a PT of €5.70, placing the stock at c8.5x core 1yr fwd EV/EBIT, still a small discount vs. the broad intl peer group.

19-20% EBIT growth in 2025e – Fourlis delivered resilient performance in FY’24 despite the Q4 headwind from the cyber incident, with OpCo sales at €529.7m (+1.6% yoy) and OpCo EBIT at €26.7m (+27% yoy) on significant gross margin expansion (+2.6pps) and contained opex inflation. Momentum appears to be carrying into 2025, with management citing 2-digit run-rates in Q2. In light of the above, we are more convicted in our view that 2025 will see strong momentum, with our numbers envisaging sales +11% yoy filtering through to EBIT growth of 19%. That said, we highlight that consistent execution remains key—particularly given a history of setbacks, some of which were outside management’s control. Sustaining delivery through the year will be crucial in rebuilding investor confidence and supporting a re-rating.

Medium-term targets: ambition vs market caution – Looking further ahead, we forecast EBIT CAGR of 17.5% through to 2029e, but remain c€8m below mgt’s 2027e operating profit guidance. Notably, we are not alone in this cautious stance—the broader market also appears to be discounting the full potential of the 2027 targets. In our view, this reflects lingering skepticism around the achievability of mgt’s roadmap, shaped by a track record of shifting or delayed execution milestones in the past. With these in mind, our updated forecasts point to group cash EBITDAaL margins reaching 7.5% by 2027e (vs guidance of 8% and 6% in 2024), as the profit uplift should more than offset ramped-up costs for network expansion. On the top line, we model c9% sales CAGR in 2026-28e, of which c6% from capacity and the rest from LFL growth as homeware demand gradually recovers and sports retail benefits from favorable mix.

Valuation – We have recalibrated our model to reflect only the retail operations within the group’s reported figures, following the TE demerger. Our 2025 EBIT estimates have been revised up by c€3m, bringing our projections broadly in line with mgt guidance, although our outer-year forecasts remain largely unchanged and well below the company’s mid-term targets. We continue to base our valuation on a SOTP approach, applying a DCF (at 10% WACC) to value Fourlis’s retail operations, while also incorporating the value of the group’s remaining 47.3% stake in the REIC.
Underlying
Fourlis Holdings S.A.

Co. is engaged in the manufacture, import and distribution of electrical household appliances and the manufacture of FOURLIS kitchen hoods. In addition, through a subsidiary, Co. is engaged in the operation of a retail chain.

Provider
Eurobank Equities
Eurobank Equities

Eurobank Equities is a Greek-based firm offering research, sales and trading services to institutional, corporate and private clients. The company is wholly owned by Eurobank, one of the 4 systemic banks in Greece.

Research is the backbone of Eurobank Equities' platform, with a team of 4 professionals committed to generating actionable investment ideas by providing timely research products. We are committed to offering value-added services to clients by filtering market noise and providing insights on the multiple sectors that we cover. Our universe includes 26 - large, medium and small cap - companies whose market capitalization amounts to 80-85% of the total market capitalization of the Athens Stock Exchange. Our research team also maintains the capacity to generate ad-hoc research for micro-cap listed companies.

Our team has consistently gained recognition among institutional investors for its quality research, having ranked No. 1 team in Greece at the Extel Surveys of 2013-2016 and 2018. We have also been named Leading Brokerage Firm in Greece over 2014-2016 and in 2018.

Analysts
Marios Bourazanis

Stamatios Draziotis CFA

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