'Increasingly positive' Berenberg ups Basic Fit to 'Buy', shares jump

Basic-Fit

01/08/2023 09:07

** Shares in Basic Fit  BFIT.AS  are up 5.7%, set for best
day since February, after Berenberg ups its rating on the stock
to "buy" from "hold" on cash generation prospects, German market
expansion
    ** The brokerage sees the low-cost fitness club operator's
cash generation set to benefit from rising club maturity and
from an increase in the share of premium memberships
    ** It also adds the club maturity as well as the share of
premium memberships should support the company's upcoming
expansion into Germany and the expansion of its operations in
existing markets
    ** "With over 1,300 gyms in Europe, Basic-Fit is already the
market leader in France and Benelux, with market shares of c25%
and c75% respectively," says the broker in a note
    ** It notes competition in Germany shouldn't be overlooked
(FitX and McFIT), but believes German market presents a good
growth opportunity
    ** With actually 8 clubs opened in Germany so far, Berenberg
 forecasts the number of Basic-Fit gyms in the country to
increase to 300 by 2030
    ** " We are increasingly positive about Basic-Fit’s
expansion ability over the mid-term and forecast a c20% revenue
CAGR from 2022 to 2027E," adds Berenberg
    ** Including today's gains, the stock is up 32.7%
year-to-date

 (Reporting by Clement Martinot)
 ((Clement.martinot@tr.com))