Eurocash confirmed at BUY, TP PLN 23.5 - Looking forward to news from the retail front
Ahead of 4Q 19e reporting on March 13 we update our forecasts for Eurocash. We tweak our TP to PLN 23.5 from PLN 24.0 and confirm our BUY recommendation. In 4Q 19 Eurocash focused on the integration of Mila and the roll-out of the common IT platform in retail. We expect the visibility for prospects of the retail business to improve significantly in 2020e, once it becomes clearer what a fully integrated retail chain under the DC brand can achieve and what are the next steps for potential network expansion. We note the relative defensive nature of Eurocashs staple business in light of the Covid-19 topic.Eurocash, through its subsidiaries, is engaged in the distribution of food products, household chemicals, alcohol, and tobacco products (fast moving consumer goods). Through a range of distribution formats, Co. and its subsidiaries focus its business activities on the wholesale distribution to customers across the wholesale market segments, in particular, to stores throughout Poland such as retail stores, convenience stores at petrol stations, restaurants, hotels and cafeterias. Co. and its subsidiaries operate a range of distribution formats focused on supplying independent stores in Poland, which primarily include: Cash and Carry, Franchise Systems, and Distribution.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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