X5 confirmed at BUY, TP USD 50.8 - Growth, dividends and exposure to e-commerce
We confirm our BUY recommendation for X5 and increase our TP to USD 50.8 (RUB 3,700) from USD 37.4 (RUB 2,650) beforeWhile we still see certain growth perspective ahead of offline business, we think that online businesses will become an increasingly important revenue growth driver
Expecting EBITDA margin staying above 7% and capex increasing more slowly than revenue we estimate the dividend yield to amount to 9% in 2021e and grow thereafter to reach 15% in 2025e
X5 Retail Group is a holding company. The main activity of Co. is the development and operation of grocery retail stores. Co. operates a retail chain of soft-discount, supermarket and hypermarket stores under the brand names "Pyaterochka", "Perekrestok" and "Karusel" in major population centres in Russia, including but not limited to Moscow, St. Petersburg, Nizhniy Novgorod, Rostov-on-Don, Kazan, Samara, Lipetsk, Chelyabinsk, Perm, Ekaterinburg and Kiev, Ukraine.
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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