Eurocash cut to HOLD, TP PLN 13.8 - Improvement in C&C as retail success remains elusive
We trim our estimates given the more distant perspective of a potential successful expansion in retail and a more severe impact from market events in wholesaleWhile Q3 still brought negative lfl sales trends in C&C, management stated that lfl sales turned positive in October
The closure of 59 DC stores in Q4 should boost EBITDA by ca. PLN 18 mn
Eurocash finalized the purchase of Arhelan on November 9 at 7x EV/EBITDA
We expect the next share price trigger to come from the outcome of the ongoing review of strategic options
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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