The Q3 performance was healthy in Portugal but weak lfl growth in Poland is concerning (c.65% of group revenue). Another issue is negative FCF in 9MFY18. Of the two explanations, while accelerated capex is acceptable the slump in working capital is concerning (management attributes it to the base effect). We have trimmed our estimates for three valuation methods (DCF, NAV and Relative valuation). However, the stock is still attractive for patient investors. No change in stock recommendation.<
01 Nov 2018
Weak Q3 results – Polish lfl and negative FCF are the culprits
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Weak Q3 results – Polish lfl and negative FCF are the culprits
Jeronimo Martins, SGPS S.A. (JEM:FRA) | 0 0 0.5% | Mkt Cap: 11,076m
- Published:
01 Nov 2018 -
Author:
Nishant Choudhary -
Pages:
3
The Q3 performance was healthy in Portugal but weak lfl growth in Poland is concerning (c.65% of group revenue). Another issue is negative FCF in 9MFY18. Of the two explanations, while accelerated capex is acceptable the slump in working capital is concerning (management attributes it to the base effect). We have trimmed our estimates for three valuation methods (DCF, NAV and Relative valuation). However, the stock is still attractive for patient investors. No change in stock recommendation.<