Jeronimo Martins: FY 2015 (first take): JM is very impressive but also very expensive…NEUTRAL, Fair Value EUR13,5 (+1%)
FY 2015 (first take): JM is very impressive but also very expensive…
We deeply admire JM’s exemplary model that should benefit in the future from moves within the industry favouring both discount and proximity. The retailer again showed its class by publishing its strongest LFL rates for two years at Biedronka (+3.8% in Q4) along with a strong margin (7.05%e i.e. +80bp), while Portugal continued to show an impressive topline-driven performance (+4.1% LFL excl. fuel at Pingo Doce and +1.4% at Recheio) and a margin in line with expectations (5.7%e, down 30 bp in a very promotional environment). Only valuation (2016 P/E of 23x vs 16x on average for the panel) remains a hindrance. Neutral.
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