Eurocash raised to BUY, TP PLN 16.0 - Back to basics
We raise our recommendation to BUY from HOLD for Polands largest wholesaler while increasing the TP to PLN 16.0 from PLN 13.8The 2023-25 strategy builds on the groups core roles of omnichannel wholesaler, franchise organiser and data platform while targeting an EBITDA (pre IFRS 16) level of PLN 1.0 bn in 2025
While our projected FY 25e EBITDA (pre IFRS 16) of PLN 705 mn falls visibly short of the target it seems to us that the market currently prices in an even weaker scenario
We view the 2023-25 strategy as a welcome step towards streamlining the groups complex operations and like the focus on closing the price gap to discounters
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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