Jerónimo Martins: Bumpy Q1 over...time for the stimulus
JMT’s Q1 EBITDA topped our estimates by 4% and BBG consensus by 2% on better LfLs and margins for Biedronka and for domestic distribution. We were particularly impressed by Biedronka’s margin resilience in a quarter with a -1.1% LfL, which points to some upside risk to our flat margin forecast for FY19e as LfL should pick up to 5.7% over the next three quarters. However, the gross margin comp should get tougher and we also expect wage inflation to accelerate and thus we prudently made very limited changes to our forecasts. The shares rose 6% on the solid numbers and are up 43% YTD, topping the SXRP vs 24%. The bar is now set at a higher level but we think JMT will live up to expectations and reiterate our Silver Bullet BUY rating. Our Eur16.7 FV offers 13% potential upside and, adjusting for Ara and Hebe losses, JMT trades at 16.8x P/E 19e and 8.5x EV/EBITDA 19e, which still seems low for what is essentially the #1 grocer in Poland. We also expect the Pln39bn economic stimulus recently announced by Poland to start impacting retail sales already in May, providing a fresh tailwind to Biedronka’s LfL.Jeronimo Martins S.G.P.S. is a holding company. Through its subsidiaries, Co. is engaged as a food distribution company with operations in Poland and Portugal. Co. operates in four segments: Portugal Retail, which comprises the business unit of JMR - Gestao de Empresas de Retalho, SGPS, S.A. (Pingo Doce supermarkets); Portugal Cash & Carry, which includes the wholesale business unit Recheio; Poland Retail, which includes the business unit with the brand Biedronka; and Others, which includes marketing services and representations, restaurants in Portugal, health and beauty retail in Poland, and its retail business in Colombia.
Haitong is the first international Chinese investment bank and our goal is to be the primary channel for capital flows into and out of China. During 2015 the Senior Management Team in London was expanded significantly to focus on this objective and to provide a full-service cross-asset markets business coupled with sector-focused investment banking. We work closely with our world-wide network of offices to bring a true depth of understanding to all client situations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.