'Size matters after all' - Berenberg starts DIY store group Hornbach with 'buy'

Hornbach Holding AG & Co KGaA

21/04/2022 09:56

** Berenberg initiates Hornbach Holding  HBH.DE  with "buy",
citing the German DIY store group's expansion and strong market
presence both in Germany and abroad
    ** The brokerage says Hornbach  HBH.DE  is growing faster
than its peers and has increased its sales densities in recent
years (about 6.4% compound annual growth rate in 2015-20),
benefiting from the withdrawal of smaller players
    ** Following COVID-19-related DIY market tailwinds,
Berenberg expects markets to normalise but Hornbach  HBH.DE  to
continue to outperform, with about 7.2% sales CAGR and 5.8%
EBITDA CAGR in 2022-24
    ** In addition, the broker sees the company to open 25 new
stores in the next five years, adding around 10% in floor
capacity, while peers are likely to close further stores or
leave the market in the long term
    ** "Peers were not, and still are not, prepared for online
DIY retail," it says, highlighting online business now accounts
for about 17% of Hornbach total revenues
    ** All five analysts covering the company rate the stock
"buy" or higher

 (Reporting by Anastasiia Kozlova)
 ((Anastasiia.Kozlova@thomsonreuters.com))