BIM - Don't Be Beguiled by 2017 Performance
BIM has shown robust top-line growth in 2017 thanks to high inflation and a pickup in traffic figures, which was mostly attributable to an improvement in consumer sentiment and a low base. In response, we now regard our operating performance estimates as too conservative so we upgrade them. For 2017 and 2018, our new forecasts are 3-4% ahead of the consensus on revenues and 6-7% ahead on EBITDA. Our new DCF-derived target price of TRY65.00 per share is still not high enough to upgrade our SELL recommendation. We recommend selling into any earnings momentum. Despite strong top-line growth this year, we have not seen any fundamental changes in the competitive environment, which has been pressuring traffic growth for years, particularly since 2014. As a result, we expect top-line growth to slow (from 20% to 15-17%) over the next few years. The current 12m forward EV/EBITDA of 15.0 implies a premium of 15% over the stock's 1y average, which includes both strong (1H17) and weak (2H16) periods.Bim Birlesik Magazalar is engaged in operating retail stores through its retail shops throughout Turkey, which sell an assortment of approx. 600 items, including a number of private labels. Co.'s object is to offer consumers basic food items and consumer goods at discount prices with quality. Co.'s private labels provides its consumers with quality tasting sausage, salami and similar meat products while at the same time being suitable to the consumers family budget. Products include meat products, breakfast and dairy products, beverages, legumes and bakery, snacks and sweets, fruits and vegetables, frozen foods, and non-food items - cleaning supplies.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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