Jumbo: dancing in a perfect storm (stays BUY)

In this report, we finetune our estimates for 2022E, adjusting for: 1) the consumer trends witnessed in 1H22 in the geographical locations where Jumbo operates; and 2) a cut in the number of stores launched this year, and assuming no lockdowns/restrictions in retail going forward. The retailer has demonstrated a resilient profile, combining successful cost containment with a solid rebound in sales domestically. After a strong 2021, Bulgaria and Romania are turning weaker, marked by stagnant growth dynamics in the first half of the year on imposed restrictions, with the negative trend easing in 2H22E, in our view. Greek and Cypriot sales seem to be performing better than our initial expectations, despite the distortion on lfl yoy comparisons due to successive lockdowns, providing a cushion for the sales outlook for the year. Overall, we expect Jumbo to maintain its trademark as the “go-to’’ retailer for price-sensitive consumers, while also defending its profitability through effective management on the COGS line. On our estimates, the stock trades at a 2022E EV/EBITDA of 5.2x and a 11.4x P/E, with deep discounts to both its peer group and the 5Y 1YF historical averages. We remain BUYers of Jumbo, and set our new 12M PT at EUR 18.3/share, offering 26% upside potential, while the total return reaches c.32%.