Colruyt has been strengthening its grip on the Belgian market by gaining market share and sustained profit margins. While this performance is expected to continue in the remainder of FY19/20, we reiterate that the top line and profitability will remain flattish. Competition is likely to increase due to the gradual revamp of traditional competitors and an encouraging start by Jumbo in Belgium.

Etablissementen Franz Colruyt

• 13 Jan 20
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Colruyt has been strengthening its grip on the Belgian market by gaining market share and sustained profit margins. While this performance is expected to continue in the remainder of FY19/20, we reiterate that the top line and profitability will remain flattish. Competition is likely to increase due to the gradual revamp of traditional competitors and an encouraging start by Jumbo in Belgium.

Etablissementen Franz Colruyt

• 13 Jan 20
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WM Morrison’s Q3 FY19/20 trading update (5 August to 3 November) was ahead of the market’s as well as our estimates. However, the performance in the subsequent nine weeks (Christmas period) has been weak, as management stepped-away from promotional activity, unlike peers. Soft inflation was also not helpful. Sustained lfl growth is quite vital for investor sentiment and management seems to be also on the same page. We take a cautious stance on the company until the Q1 results (the next key trigger).

WM Morrison Supermarkets

• 09 Jan 20
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WM Morrison’s Q3 FY19/20 trading update (5 August to 3 November) was ahead of the market’s as well as our estimates. However, the performance in the subsequent nine weeks (Christmas period) has been weak, as management stepped-away from promotional activity, unlike peers. Soft inflation was also not helpful. Sustained lfl growth is quite vital for investor sentiment and management seems to be also on the same page. We take a cautious stance on the company until the Q1 results (the next key trigger).

WM Morrison Supermarkets

• 09 Jan 20
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Greggs finished 2019 with accelerating revenue growth. It continues to benefit from increasing customer growth as the brand strengthens and it takes share in the ‘food-on-the-go’ market. With increased cost pressures, management remains confident of mitigating these through ongoing business efficiencies and select price increases, where possible, and some one-off benefits. Our forecasts, which are at the high end of consensus, are broadly unchanged. Our DCF-based valuation is 2,096p.

Greggs

• 08 Jan 20
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Greggs finished 2019 with accelerating revenue growth. It continues to benefit from increasing customer growth as the brand strengthens and it takes share in the ‘food-on-the-go’ market. With increased cost pressures, management remains confident of mitigating these through ongoing business efficiencies and select price increases, where possible, and some one-off benefits. Our forecasts, which are at the high end of consensus, are broadly unchanged. Our DCF-based valuation is 2,096p.

Greggs

• 08 Jan 20
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No surprises in the Q4 trading update of Ocado’s retail business. While the capacity constraints are unlikely to go away in the near term, we note that most of the growth is driven by new customer demand in the existing catchment areas. The current momentum is sustainable, in our opinion. No change to the stock recommendation.

Ocado Group

• 16 Dec 19
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No surprises in the Q4 trading update of Ocado’s retail business. While the capacity constraints are unlikely to go away in the near term, we note that most of the growth is driven by new customer demand in the existing catchment areas. The current momentum is sustainable, in our opinion. No change to the stock recommendation.

Ocado Group

• 16 Dec 19
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Tesco is evaluating the strategic options for its Asian business (Thailand and Malaysia) after being approached by a buyer (name undisclosed in the press release). In our opinion, Tesco is not desperate to dispose of the Asian operations at the market rate / small premium. Hence, we would not be surprised if an attractive valuation is offered, if the transaction is concluded – at least 1x EV / Sales multiple, pegging the value north of £5bn.

Tesco

• 09 Dec 19
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Tesco is evaluating the strategic options for its Asian business (Thailand and Malaysia) after being approached by a buyer (name undisclosed in the press release). In our opinion, Tesco is not desperate to dispose of the Asian operations at the market rate / small premium. Hence, we would not be surprised if an attractive valuation is offered, if the transaction is concluded – at least 1x EV / Sales multiple, pegging the value north of £5bn.

Tesco

• 09 Dec 19
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Ocado has on-boarded Aeon, one of the largest retailers in Japan, under its Solutions business. The deal is not only a pleasant surprise (marks its entry into Asia) but is also valuation accretive. With the UK-based company’s plate (order book) looking quite full, the focus now shifts towards management’s success in implementation. We will increase our estimates upwards and maintain a positive stance on Ocado’s strong business model.

Ocado Group

• 02 Dec 19
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Ocado has on-boarded Aeon, one of the largest retailers in Japan, under its Solutions business. The deal is not only a pleasant surprise (marks its entry into Asia) but is also valuation accretive. With the UK-based company’s plate (order book) looking quite full, the focus now shifts towards management’s success in implementation. We will increase our estimates upwards and maintain a positive stance on Ocado’s strong business model.

Ocado Group

• 02 Dec 19
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Greggs’ trading update for the first six weeks of Q419 highlights an improvement in sales growth. Like-for-like (l-f-l) sales growth of 8.3% follows 7.4% in Q319 and is against a tougher comparative, allaying fears about Greggs’ sales momentum. We upgrade our l-f-l sales forecast for FY19 by 70bp to 8.6% growth, which feeds through to PBT forecasts increasing by 4.6% in FY19 and 2.8% in FY20. Our DCF-based valuation increases to 2,091p.

Greggs

• 12 Nov 19
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Greggs’ trading update for the first six weeks of Q419 highlights an improvement in sales growth. Like-for-like (l-f-l) sales growth of 8.3% follows 7.4% in Q319 and is against a tougher comparative, allaying fears about Greggs’ sales momentum. We upgrade our l-f-l sales forecast for FY19 by 70bp to 8.6% growth, which feeds through to PBT forecasts increasing by 4.6% in FY19 and 2.8% in FY20. Our DCF-based valuation increases to 2,091p.

Greggs

• 12 Nov 19
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Carrefour’s Q3 19 performance was slightly below our expectations. While the rebound in the Spanish operations and strong gains in LatAm were encouraging, management needs to do more to revive ailing businesses – French hypers, Italy and Belgium. Q4 19 should see a slightly better performance due to easier comparables. We will tweak our financial estimates but maintain the positive stance on the stock.

Carrefour

• 31 Oct 19
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Carrefour’s Q3 19 performance was slightly below our expectations. While the rebound in the Spanish operations and strong gains in LatAm were encouraging, management needs to do more to revive ailing businesses – French hypers, Italy and Belgium. Q4 19 should see a slightly better performance due to easier comparables. We will tweak our financial estimates but maintain the positive stance on the stock.

Carrefour

• 31 Oct 19
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Despite the decent Q4 performance, the shuffling at the top has raised fresh questions about the revitalisation of top-line performance and the successful implementation of operational efficiency plan. While the domestic performance is still in the black, management needs to address multiple pain-points for sustained top-line growth. We take a cautious stance on the future performance of the stock, although the positive recommendation is maintained.

METRO

• 29 Oct 19
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Despite the decent Q4 performance, the shuffling at the top has raised fresh questions about the revitalisation of top-line performance and the successful implementation of operational efficiency plan. While the domestic performance is still in the black, management needs to address multiple pain-points for sustained top-line growth. We take a cautious stance on the future performance of the stock, although the positive recommendation is maintained.

METRO

• 29 Oct 19
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Jeronimo Martins posted Q3 results slightly ahead of our estimates. While the Polish performance was robust again, deflationary conditions and strong comparables moderated the growth in the Portuguese retail format Pingo Doce. We expect the Q4 lfl growth to soften slightly. The profit margin is estimated to remain flat in the forecast years. We will improve our estimates slightly.

Jeronimo Martins SGPS

• 24 Oct 19
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Jeronimo Martins posted Q3 results slightly ahead of our estimates. While the Polish performance was robust again, deflationary conditions and strong comparables moderated the growth in the Portuguese retail format Pingo Doce. We expect the Q4 lfl growth to soften slightly. The profit margin is estimated to remain flat in the forecast years. We will improve our estimates slightly.

Jeronimo Martins SGPS

• 24 Oct 19
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