UBS downgrades Jeronimo Martins to 'sell' on dismal near-term outlook

JMT

01/02/2023 12:38

** UBS downgrades Portuguese retailer Jeronimo Martins
 JMT.LS  to "sell" from "neutral" 
    ** Shares slide 2% in morning trade, underperforming the
 .STOXX  index, which rises 0.2%
    ** Brokerage expects co's revenue growth to further slow
down in H2 due to lower volumes and normalizing food inflation
    ** Sees JMT's sales growth to moderate from 22% in FY22
towards 9%-10% over 2024-25 estimates, with deceleration
starting in Q2 2023, and the trend strengthening over H2 2023
and H1 2024
    ** It also sees further risk to margins from trading down,
competition, and opex inflation
    ** The combination of decelerating sales growth and lower
margins "puts the stock at risk of derating towards the lower
end of its long-term valuation range" - UBS  
    ** Including today's fall, JMT shares fell 3.47% YTD
 (Reporting by Matteo Allievi)
 ((Matteo.allievi@thomsonreuters.com))