Home world CaixaBank / BPI raises Jerónimo Martins valuation to 18.55 euros


CaixaBank / BPI raises Jerónimo Martins valuation to 18.55 euros

by ace
CaixaBank / BPI raises Jerónimo Martins valuation to 18.55 euros

CaixaBank / BPI analysts increased Jerónimo Martins' target price by 6.3% to 18.55 euros per share, due to good growth prospects in Poland. The country is implementing a series of measures to boost local purchasing power.

This target price increase means a potential increase of 17.55% compared to the closing price of the last session (15.78 euros).

The country's retail tax, which came into force in 2016, will last until at least 2021. However, rising minimum wages, rising inflation and new tax incentive measures overshadow the mandatory rate. all retailers to deliver to the Polish state about 466 million euros a year.

"Jerónimo Martins is now a 'must have' asset. Comparable sales are expected to grow in Poland (inflation, minimum wage, tax breaks)," according to a note signed by analysts José Rito and Guilherme Macedo Sequeira to which Business had access.

The rise in inflation in Poland – 7.2% in August, one of the highest in the last decade -, tax initiatives (such as 13th salary for pensioners or tax benefits for those with more children), and the rise of 15.6% of the minimum wage in 2020 to about 600 euros (2,600 zloty) will increase purchasing power in the country.

All of these measures are estimated to have a 9 billion impact on the local economy, analysts said, predicting good growth conditions for the country's retail sector.

"We expect Jerónimo Martins to achieve a comparable sales increase of 6% by the end of 2020, from 5.3% in 2019, as tax initiatives will only take effect next year," they stressed.

Also in Colombia, where Jerónimo Martins is represented by Ara, the situation seems to be improving. Increased margins and an improved distribution network "are expected to continue to cause Ara to reduce losses."

Today Jerónimo Martins fell 0.47% to 15.78 euros per share. However, since the beginning of this year the Portuguese retailer has valued more than 55%.

Note: The news does not dispense with the research note issued by the investment house, which may be requested from it. Business warns that there may be conflicts of interest in some investment banks in relation to the listed stock market, such as equity interests. To make investment decisions, you should consult the full research note and consult your financial intermediary.

. (tagsToTranslate) Jerónimo Martins (t) Biedronka (t) Ara (t) Poland (t) Colombia (t) research (t) caixabank bpi


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