Basic Fit slips after Berenberg rating cut

Basic-Fit

30/07/2024 12:01

** Basic Fit  BFIT.AS  shares fall around 7% and are on
track for their worst day since mid-March, with analysts point
to a rating cut from Berenberg 
  
        ** Broker flags competition risks and debt concerns,
downgrading the Dutch low-cost gym operator to "hold" from "buy"
and cutting its PT by 30% to 26 euros
    ** "Although we like its roll-out story, we note that
increasing competition and different underlying market dynamics
outside of company's historical markets (France and Benelux)
might bring a degree of execution risk​," Berenberg says 
    ** Analysts Kris Kippers at Degroof Petercam, Marc
Zwartsenburg at ING, and Lynn Hautekeete from KBC Securities
point to the downgrade likely causing shared to fall 
        ** Kippers also notes that Basic Fit is "one of the most
shorted names", which could exacerbate the share price reaction 
  
    ** Hautekeete also points to a share "over-reaction" after
last week's H1 results: "results did not beat guidance and the
stock went up by 12% that day so was bound to come back down" 
    ** Basic Fit's cash-flow generation is expected to improve,
but the company is still indebted, Berenberg says, and flags
short-term uncertainty despite "compelling" long-term
fundamentals

 



 (Reporting by Olivier Sorgho)
 ((Olivier.Sorgho@thomsonreuters.com))