Jumbo: The noose is tightening (stays BUY)
We have updated our model on Jumbo, adjusting our estimates downwards, to reflect: 1) pressure from rising input and transportation costs; 2) a slowdown in the network rollout vs. our previous estimates; and 3) its retained dividend policy for the year. The spike in transportation and input costs has caused the name to fall out of investors’ favour recently. Despite the challenging operating environment, we believe that the current share price does not fully reflect the value of Jumbo, given the strong sales performance, management’s track record and the company’s defensive balance sheet, in our view. Our valuation yields 26.6% upside, with the stock trading at our 2022E 11.2x P/E and 5.1x EV/EBITDA, double-digit discounts on 1YF multiples, creating an attractive entry point, in our view. Therefore, we remain BUYers, but we have cut our 12M price target (PT) to EUR 17.7.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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