Jeronimo Martins SGPS S/A

Jeronimo Martins S.G.P.S. is a holding company. Through its subsidiaries, Co. is engaged as a food distribution company with operations in Poland and Portugal. Co. operates in four segments: Portugal Retail, which comprises the business unit of JMR - Gestao de Empresas de Retalho, SGPS, S.A. (Pingo Doce supermarkets); Portugal Cash & Carry, which includes the wholesale business unit Recheio; Poland Retail, which includes the business unit with the brand Biedronka; and Others, which includes marketing services and representations, restaurants in Portugal, health and beauty retail in Poland, and its retail business in Colombia.
  • TickerJMT
  • ISINPTJMT0AE0001
  • ExchangeEuronext Lisbon
  • SectorFood & Drug Retailers
  • CountryPortugal

Analysts

Filipe Rosa

Jerónimo Martins: A soft end to a tough year in Poland

JMT’s Q4 sales rose 4.3% YoY, largely in line with our forecast and BBG consensus. However Biedronka’s LfL, at 1.2%, was a small miss to HTGe (2.0%) and consensus (1.4%) despite higher basket inflation (0% vs HTGe -1.3%) and this may raise some eyebrows as it could signal a strategic shift towards margin protection instead of top-line growth. JMT told us that the weight of products sold at a promotion was broadly stable QoQ and that the higher basket inflation was mostly driven by a recovery in the prices of sugar and fruit & vegetables that impacted its basket more than food CPI. We would als...

Research Team

WOOD Morning (15 January)

HEADLINES: • MONETA Money Bank: deal still more sweet than sour (stays BUY) • Turkish automotive: uninspiring December exports due to 12% LCV contraction NEGATIVE • Jeronimo Martins: preliminary 4Q18 sales a touch above expectations NEUTRAL • Globalworth: board approves interim DPS of EUR 0.27 (6.75% annualised yield) NEUTRAL • Polish telecoms: Poland applies to EU for extension of 700MHz spectrum distribution deadline to 2022 NEUTRAL • Polish gencos: URE head speaks at Powerpol congress

Filipe Rosa

Jerónimo Martins: Getting the ball rolling again

JM will report Q4 sales on Jan 11 and results on Feb 27, both post market close. Main investor focus should be once again on Biedronka’s LfL, which has missed consensus for the past two quarters. We see very limited room for another miss in Q4 as consensus expectations have come down significantly post Q3 and Poland food retail sales in Oct/Nov have been stronger than we expected. We forecast LfL to pick up from 0.8% in Q3 to 2.0% in Q4, mostly on the back of a weaker headwind from the Sunday ban and, if anything, we see some upside risk if Dec retail sales turn out as strong as Nov’s. Any min...

Research Team

Focus: Turk Telekom – OTAS out, banks in; Polish gencos – new law to freeze 2019 power prices for retail customers and local governments; Polish gencos – 2023E capacity auction; Enea – Ostroleka C construction starts

HEADLINES: • Turk Telekom: OTAS out, banks in POSITIVE • Polish gencos: new law to freeze 2019 power prices for retail customers and local governments NEUTRAL • Polish gencos: 2023E capacity auction • Enea: Ostroleka C construction starts NEUTRAL • Ciech: may face PLN 67.2m in tax and late interest NEGATIVE • Polish banks: Puls Biznesu on prospective M&A trends in Polish banking sector • Echo Investment: management buys shares for c.EUR 86k POSITIVE • Russian telecoms: mobile operators agree on joint 5G development NEUTRAL • Play Communications: resigns from national roaming agreement with ...

Research Team

The Rear-View Mirror – EME markets: Turkish equities stand out in November

EME Equity Market – November 2018 Market performance – Turkey up by 13.3% mom in EUR terms in November. The MSCI EME gained 2.2% in November, while the Turkish ISE rose by 13.3% in EUR terms, which was driven mostly by the appreciation of the TRY against EUR, as the index gained 6.1% mom in TRY terms. The Hungarian BUX was up by 8.3% mom, followed by the Polish WIG20 (+7.7% mom) and Romania’s BET (+1.8% mom). The Czech PX index was flat mom, while the Russian MOEX and the Greek ASE ended the month in negative territory (-0.3% mom and -1.5% mom, respectively).

Filipe Rosa

Jerónimo Martins: A soft end to a tough year in Poland

JMT’s Q4 sales rose 4.3% YoY, largely in line with our forecast and BBG consensus. However Biedronka’s LfL, at 1.2%, was a small miss to HTGe (2.0%) and consensus (1.4%) despite higher basket inflation (0% vs HTGe -1.3%) and this may raise some eyebrows as it could signal a strategic shift towards margin protection instead of top-line growth. JMT told us that the weight of products sold at a promotion was broadly stable QoQ and that the higher basket inflation was mostly driven by a recovery in the prices of sugar and fruit & vegetables that impacted its basket more than food CPI. We would als...

Filipe Rosa

Jerónimo Martins: Getting the ball rolling again

JM will report Q4 sales on Jan 11 and results on Feb 27, both post market close. Main investor focus should be once again on Biedronka’s LfL, which has missed consensus for the past two quarters. We see very limited room for another miss in Q4 as consensus expectations have come down significantly post Q3 and Poland food retail sales in Oct/Nov have been stronger than we expected. We forecast LfL to pick up from 0.8% in Q3 to 2.0% in Q4, mostly on the back of a weaker headwind from the Sunday ban and, if anything, we see some upside risk if Dec retail sales turn out as strong as Nov’s. Any min...

Research Team

The Rear-View Mirror – EME markets: Turkish equities stand out in November

EME Equity Market – November 2018 Market performance – Turkey up by 13.3% mom in EUR terms in November. The MSCI EME gained 2.2% in November, while the Turkish ISE rose by 13.3% in EUR terms, which was driven mostly by the appreciation of the TRY against EUR, as the index gained 6.1% mom in TRY terms. The Hungarian BUX was up by 8.3% mom, followed by the Polish WIG20 (+7.7% mom) and Romania’s BET (+1.8% mom). The Czech PX index was flat mom, while the Russian MOEX and the Greek ASE ended the month in negative territory (-0.3% mom and -1.5% mom, respectively).

Jakub Mician ...
  • Lukasz Wachelko, CFA

Jeronimo Martins: Cash machine (stays BUY)

We maintain our BUY rating on Jeronimo Martins (JMT), with a new price target (PT) of EUR 13.0/share (from EUR 18.6) as we see the stock as oversold. At a 1YF EV/EBITDA of 7.1x, 5% below Eurocash and two standard deviations below its long-term average, JMT is trading close to its 2014 lows. At the same time, we see the position of its core banner, Biedronka, as stronger than ever. With its unquestioned market leadership, Biedronka has managed to neutralise the negative impact of the Sunday trading ban and wage inflation on its profitability. At the same time, the net cash on its balance sheet ...

Research Team

The Rear-View Mirror – EME markets: Turkish ESI continued to plummet in October

EME Equity Market – October 2018 Market performance – Turkey up only 1.4% mom in EUR terms in October 2018. The MSCI EME lost 3.4% in October, vs. September’s 6.1% gain; while the Turkish ISE rose by 1.4%, following September’s +17% mom; and the BET index recorded a gain of 1.1%. Prague’s PX index lost 4.2% in October, after September’s rise of 3.1%, while Moscow’s index lost 2.9%. Budapest’s BUX ended October marginally flat, losing 0.4%. A poor performance was seen by the ASE, losing 7.5% in October, followed by Poland’s WIG20 loss of 7.1% (all performances measured in EUR terms).

Research Team

WOOD Morning (15 January)

HEADLINES: • MONETA Money Bank: deal still more sweet than sour (stays BUY) • Turkish automotive: uninspiring December exports due to 12% LCV contraction NEGATIVE • Jeronimo Martins: preliminary 4Q18 sales a touch above expectations NEUTRAL • Globalworth: board approves interim DPS of EUR 0.27 (6.75% annualised yield) NEUTRAL • Polish telecoms: Poland applies to EU for extension of 700MHz spectrum distribution deadline to 2022 NEUTRAL • Polish gencos: URE head speaks at Powerpol congress

Research Team

Focus: Turk Telekom – OTAS out, banks in; Polish gencos – new law to freeze 2019 power prices for retail customers and local governments; Polish gencos – 2023E capacity auction; Enea – Ostroleka C construction starts

HEADLINES: • Turk Telekom: OTAS out, banks in POSITIVE • Polish gencos: new law to freeze 2019 power prices for retail customers and local governments NEUTRAL • Polish gencos: 2023E capacity auction • Enea: Ostroleka C construction starts NEUTRAL • Ciech: may face PLN 67.2m in tax and late interest NEGATIVE • Polish banks: Puls Biznesu on prospective M&A trends in Polish banking sector • Echo Investment: management buys shares for c.EUR 86k POSITIVE • Russian telecoms: mobile operators agree on joint 5G development NEUTRAL • Play Communications: resigns from national roaming agreement with ...

Research Team

WOOD Morning (29 November)

HEADLINES: • Purcari Wineries: wine now, or whine later (BUY - initiation of coverage) • Jeronimo Martins: cash machine (stays BUY) • Gedeon Richter: A tale of two portfolios (stays HOLD) • Lukoil: 3Q18 results - strong, as expected • Echo Investment: 3Q18 - a decent quarter; Brewery J pre-sold at 5.0% yield (double the cost) NEUTRAL • Immofinanz: 3Q18 - a weak quarter NEUTRAL • Kernel: 1Q19 results, beat on revaluation of assets NEUTRAL • PGE: intention to buy remaining 30% in the SPV responsible for the nuclear project NEUTRAL • LiveChat Software: key takeaways from 3Q18 conference NEUTR...

Research Team

WOOD Morning (31 October)

HEADLINES: • Warsaw Stock Exchange: 3Q18 EBITDA 5% below consensus on both weaker revenues and higher costs NEGATIVE • Santander Bank Polska: posts solid set of 3Q18 numbers • OMV Petrom: 3Q18 results - strong results beat estimates POSITIVE • Aselsan: 3Q18 results - operating numbers in line, but 31% NI beat POSITIVE • MOL: 3Q18 results - EBITDA in line, strong net income performance POSITIVE • OMV: 3Q18 review - strong results, but bottom line disappoints NEUTRAL • Jeronimo Martins: 3Q18 results in line with expectations NEUTRAL • Podravka: 3Q18 results above our expectations due to one-off...

Research Team

Focus: Piraeus Bank – clarification on Tier II issuance; OMV replaces assets swap with Gazprom with basic sale agreement; Mytilineos – read-across from closure of Alunorte refinery

HEADLINES: • Piraeus Bank: clarification on Tier II issuance • OMV: replaces assets swap with Gazprom with basic sale agreement NEUTRAL • Mytilineos: read-across from closure of Alunorte refinery • Coca-Cola HBC: reportedly interested in Russian bottled water leader NEUTRAL • Kruk: acquires portfolio in Romania POSITIVE • Echo Investment: sold 61 apartments in September and delivered 50 • Dom Development: sells 946 units in 3Q18, down 12% yoy NEUTRAL • JSW: May's tremor to lower 2018E coal production by c.0.5mt (c.3.3%) NEGATIVE • CD Projekt: Cyberpunk rumoured for 2019 NEUTRAL • Kety: op...

An unfavourable environment weighs on JERONIMO MARTINS SA, which sees a downgrade to Slightly Negative

The independent financial analyst theScreener just requalified the general evaluation of JERONIMO MARTINS SA (PT), active in the Food Retailers & Wholesalers industry. As regards its fundamental valuation, the title still shows 1 out of 4 stars and its market behaviour is seen as moderately risky. theScreener believes that the unfavourable environment weighs on the sector and penalises the company, which sees a downgrade to its general evaluation to Slightly Negative. As of the analysis date November 3, 2017, the closing price was EUR 16.07 and its target price was estimated at EUR 14.45.

Ford Equity International Rating and Forecast Report

Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind each recommendation and reflect the fundamental and price data as of the last trading day of the week...

MarketLine Department

Deoleo, S.A. - Strategy, SWOT and Corporate Finance Report

Deoleo, S.A. - Strategy, SWOT and Corporate Finance Report Summary Deoleo, S.A. - Strategy, SWOT and Corporate Finance Report, is a source of comprehensive company data and information. The report covers the company's structure, operation, SWOT analysis, product and service offerings and corporate actions, providing a 360˚ view of the company. Key Highlights Deoleo, S.A. (Deoleo) is a bottled olive oil manufacturing company. The company is involved in refining, bottling and marketing of olive oil and seed oils. It produces and sells seed oils, rice, table olives, vinegars and sauces. Deole...

Expert Corporate Governance Service (ECGS)

Proxy Report - 12/04/2018

In item 2, the Board proposes to distribute a dividend of € 0.6132 per share on 2017 results, by 1.3% higher than the dividend paid in the previous year despite a 35.0% decrease in consolidated net income. The dividend distribution amounts to almost 100% of the consolidated net income (€ 385 million), which is significantly higher than the disclosed Company's policy to distribute from 40% to 50% of consolidated net income. We regret that the proposed dividend distribution is not fully covered by free cash flow (€ 249 million in 2017). However, dividends were fully covered by net earnings and c...

Valérie GASTALDY

Analyse court terme - JERONIMO MARTINS SGPS SA : La tendance de fond est clairement orientée à la baisse.

La tendance de fond est clairement orientée à la baisse. Les prix baissent à nouveau, mais le mouvement est devenu hésitant. Le prochain support est à 10,728 €. La tendance de fond serait remise en cause en cas de franchissement de 13,195 €.

Valérie GASTALDY

Short term view - JERONIMO MARTINS SGPS SA : The background trend is clearly bearish.

The background trend is clearly bearish. Prices are falling again, but the movement has become hesitant. The next support is at €10.728. The background trend would be questioned should prices rise above €13.195.

Valérie GASTALDY

Analyse court terme - JERONIMO MARTINS SGPS SA : La tendance de fond est clairement orientée à la baisse.

La tendance de fond est clairement orientée à la baisse. Les prix baissent à nouveau, mais le mouvement est devenu hésitant. Le prochain support est à 10,728 €. La tendance de fond serait remise en cause en cas de franchissement de 13,195 €.

Valérie GASTALDY

Short term view - JERONIMO MARTINS SGPS SA : The background trend is clearly bearish.

The background trend is clearly bearish. Prices are falling again, but the movement has become hesitant. The next support is at €10.728. The background trend would be questioned should prices rise above €13.195.

Valérie GASTALDY

Analyse moyen terme - JERONIMO MARTINS SGPS SA : Le mouvement se poursuit.

La tendance est baissière. Le mouvement se poursuit. Le prochain objectif est à 12,148 €, puis 9,420 €. Le franchissement de 17,317 € remettrait en cause la suite de la baisse.

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