Exane ups Colruyt to 'outperform' on margin rebound potential

Colruyt NV

26/02/2024 12:03

** Exane BNP Paribas upgrades Belgian food retailer Colruyt
 COLR.BR  to "outperform" from "neutral", saying it sees scope
for further earning beats as the group rebuilds margins and
capital allocation credibility
    ** The broker says that easing headwinds such as cost
inflation, cross border shopping and increased competition
create the conditions for a less pressurised outlook
    ** "We're confident that Colruyt's recent 220 basis points
margin rebound to 4.5% is sustainable", Exane says
    ** It notes however that the potential for a rebound is
underappreciated by the market, with shares pricing at 3.6% EBIT
margin
    ** "Colruyt may not rapidly rebound to its above 5%
pre-COVID 19 margin but investors expectations seem doubtful on
recent progress being held", it adds
    ** Exane also ups its TP by ~25% to 52 euros
    ** Out of 10 analysts covering the stock, two rate the stock
"buy", six "hold" and two "sell"
    
    

 (Reporting by Carole Lebreton)
 ((Carole.lebreton@thomsonreuters.com))