(CercleFinance.com) – The stock held up well with a 1% gain as Invest Securities lowered its recommendation on the stock.
Invest Securities lowers its recommendation to neutral (against buy) and its target price to 10.2E (against 12.50E).
The analyst indicates that Metro would not meet its very committed forecasts for the current financial year, already compromised by the resurgence of the epidemic (Omicron) which affected a quarter where any alteration in activity in the outlet highly sensitive Horeca is difficult to recover given the decisive weight of this quarter (Q4 of the calendar year).
‘The CMD comes to increase this disruptive scheme, Metro having communicated on a resolutely proactive strategy including a significant increase in investments, up to 2.5% of turnover in a BM recognized to be low capital intensive’ indicates Invest Securities .
‘We see it as a derivative of a transitory increase in the intensity of costs, the only way for us to legitimize a low leverage on the growth in turnover announced by the company (+4% on average by 2025). We also see in the group’s strategy a risk of execution and additional costs if the FSD activity and especially the Online (market place) drain the substance of the warehouse stores. The group has issued optimistic forecasts for the second half of the decade, with an FCF of 600mE by 2030, forecasts that are difficult to validate at such a distant horizon,” adds the analysis office.
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