Citi ups Basic Fit to 'buy', deems recent drop in shares an overreaction

Basic-Fit

17/11/2022 07:20

** Citigroup raises Dutch discount gym chain Basic Fit
 BFIT.AS  to "buy" from "neutral" citing a recent share price
over-correction after it lowered its 2022 targets
    ** "We believe the recent fall in share price to be a
significant over-reaction which leaves a lot of value on the
stock," the broker says
    ** The group, which operates more than 350 gyms in the
Netherlands, Belgium, France and Spain, in October cut its
annual guidance after lower membership numbers weighed on Q3
sales
    ** Citi says it continues to assume Basic Fit will be able
to open 250 new gyms per year from 2023 to 2025, adding the
group's track record of delivering on new sites is strong
    ** However, the broker cuts the target price by 11.7% to
41.5 euros and retains "high risk" rating for the stock given
the potential impact a broad-based recession could have on gym
memberships and future openings
    ** Credit Suisse also cuts its target price by 16% to 40
euros but remains positive on the stock ("outperform"), citing
strong growth prospects and intact long-term targets
 (Reporting by Diana Mandiá)
 ((diana.mandiaalvarez@thomsonreuters.com))