Jeronimo Martins: Cash machine (stays BUY)
We maintain our BUY rating on Jeronimo Martins (JMT), with a new price target (PT) of EUR 13.0/share (from EUR 18.6) as we see the stock as oversold. At a 1YF EV/EBITDA of 7.1x, 5% below Eurocash and two standard deviations below its long-term average, JMT is trading close to its 2014 lows. At the same time, we see the position of its core banner, Biedronka, as stronger than ever. With its unquestioned market leadership, Biedronka has managed to neutralise the negative impact of the Sunday trading ban and wage inflation on its profitability. At the same time, the net cash on its balance sheet and its free cash flow generation (a 5% FCF yield) allow for healthy dividend stream. On consensus numbers, JMT offers a 2018E dividend yield of 4.3%, more than double the industry average. Moreover, similar to last year, we see a material probability of a 100% payout, bringing the yield to 5.8%.Jeronimo Martins S.G.P.S. is a holding company. Through its subsidiaries, Co. is engaged as a food distribution company with operations in Poland and Portugal. Co. operates in four segments: Portugal Retail, which comprises the business unit of JMR - Gestao de Empresas de Retalho, SGPS, S.A. (Pingo Doce supermarkets); Portugal Cash & Carry, which includes the wholesale business unit Recheio; Poland Retail, which includes the business unit with the brand Biedronka; and Others, which includes marketing services and representations, restaurants in Portugal, health and beauty retail in Poland, and its retail business in Colombia.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.