Merger Should Deliver Savings, but Competition Intensifies for Ahold Delhaize; Shares Slightly Cheap
After reassessing the assumptions underlying our DCF model, we are lowering our fair value estimate for no-moat Ahold Delhaize to EUR 18.60 from EUR 21, though we still surmise that the firm lacks a competitive edge. Our estimate implies a 2018 price/earnings ratio of 12 times and enterprise value/EBITDA of 6 times.We now expect 1.8% top-line growth and 3.9% average operating margin over the next decade, versus our earlier 0.9% and 4.4% (for a five-year forecast horizon) respective projections,...
Koninklijke Ahold Delhaize is an international group of supermarket and foodservice operators based in Europe and the U.S. Co. operates supermarkets and convenience stores. In addition, Co. provides online food retailing services. Co. also finances, develops and manages store sites and shopping centers. Ahold Europe comprises Albert Heijn in the Netherlands and Belgium; Etos, Gall & Gall, and albert.nl in the Netherlands; and Albert / Hypernova in the Czech Republic and Slovakia. Ahold USA is organized into four retail divisions: Giant Carlisle, Giant Landover, Stop & Shop New England, and Stop & Shop New York Metro. The Peapod online business is also part of Ahold USA.
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