Jumbo: Not that cheap, but cheerful (downgraded to HOLD)
With another strong year in the books, and a sizeable 52-week rally of 47%, we believe that Jumbo has limited upside to offer in the short term, and have decided to downgrade the stock to HOLD (from Buy), with a new 12M price target (PT) of EUR 21.5/share (15% upside). We have revised our estimates, taking into consideration: 1) the annual company guidance for 5% sales growth and a 20% increase in the DPS for 2019-21E; 2) the 2020E store rollout in Romania, Greece and Cyprus; and 3) the change in the calendar-year store rollout, underpinning a three-year EPS CAGR of 11%. Overall, we view Jumbo as a long-term growth story, and as a well-diversified vehicle to play the potential Greek macro recovery. However, we believe that part of this upside is priced in and would therefore wait for a more attractive entry point, as the stock is trading currently at an all-time high 2020E EV/EBITDA of 8.3x and P/E of 13.8x, on our estimates.Jumbo is a trading company based in Greece. Co.'s main operation is retail sale of toys, baby items, seasonal items, decoration items, books and stationery. A part of its operations is wholesale of toys and similar items to third parties. Co. and its subsidiaries have four geographical segments: Greece, Cyprus, Bulgaria and Romania. At June 30 2015, Co. operated 72 stores in Greece, Cyprus, Bulgaria and in Romania and the on line store e-jumbo.
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.
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