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

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).

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.

Christian Guyot

INVEST SECURITIES - Jeronimo Martins : Inflexion du momentum de croissance confirmée - VENTE ; OC 11€ vs 12,4€

Il y a des limites à tout. Contexte sectoriel oblige, JM a expérimenté les siennes en matière d'évaluation face à un momentum de croissance saturé et donc déclinant. Cela ne remet pas en cause la qualité de la stratégie déployée en Pologne d'abord (Biedronka) et au Portugal ensuite où le groupe cultive une domination par la part de marché servie par la force de ses concepts. Si JM bénéficie en outre sur ses débouchés principaux d'une bonne visibilité liée à des partages de marché faiblement évolutifs et à une relative sécurité de la conjoncture dont ils bénéficient, en revanche il tarde à fair...

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

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).

Christian Guyot

INVEST SECURITIES - Jeronimo Martins : Inflexion du momentum de croissance confirmée - VENTE ; OC 11€ vs 12,4€

Il y a des limites à tout. Contexte sectoriel oblige, JM a expérimenté les siennes en matière d'évaluation face à un momentum de croissance saturé et donc déclinant. Cela ne remet pas en cause la qualité de la stratégie déployée en Pologne d'abord (Biedronka) et au Portugal ensuite où le groupe cultive une domination par la part de marché servie par la force de ses concepts. Si JM bénéficie en outre sur ses débouchés principaux d'une bonne visibilité liée à des partages de marché faiblement évolutifs et à une relative sécurité de la conjoncture dont ils bénéficient, en revanche il tarde à fair...

Filipe Rosa

Jerónimo Martins: Close, but no cigar

JMT’s Q3 results were very close to being uneventful, with sales, EBITDA and earnings all largely in line with BBG consensus. However, the fact that Biedronka’s 0.8% LfL has again missed a dampened consensus of 2.0% is likely to raise some eyebrows and could lead to further share price weakness. That said, we see no reason for alarm as we believe that Q3’s unequivocally weak LfL was driven by market issues (Sunday trading ban combined with warmer than usual weather) rather than by any structural corrosion of Biedronka’s competitive position. Thus, although we have cut our LfL forecast for ‘18e...

Nuno Estácio

4Q18 Iberian Silver Bullets: Iberian Top Picks

We present our 28th Iberian Silver Bullets, where we widen our selection to include large cap companies with strong fundamental upside/downside or that are linked to a specific event that could drive out/underperformance in the next three months. We maintain NOS, MásMóvil and Jerónimo Martins and add as new ideas Iberdrola, Logista and Navigator.

Filipe Rosa

Jerónimo Martins: Cruel summer but not without hope

Ahead of Q3 results (Oct 30) we cut JMT’s ‘18e-‘20e earnings by an avg of 4% mostly on lower forecast sales in Poland. After a muted impact in the first four months, the headwind from the new Sunday ban seems to have picked up materially in Jul/Aug. This leads us to be more cautious regarding the impact from the ban on Biedronka’s LfL growth up to ‘20e, when trade will only be allowed on 7 Sundays. Despite the lower LfLs and the still high wage inflation, we keep our flattish EBITDA mg assumption for Biedronka as we expect its gross margin to continue to trend higher, benefiting from a more ra...

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...

Research Team

Focus: Romanian banks - keeping our BUYs on BRD-GSG and Banca Transilvania; S Immo’s 2Q18 - good set of results, in line with our expectations, HOLD reiterated; Eurobank’s 2018 results - good news across the board; Alpha Bank – mixed result

HEADLINES: • Romanian banks: that's how to play the macro story (BRD-GSG and Banca Transilvania stay BUY) • S Immo: 2Q18 - good set of results, in line with our expectations, HOLD reiterated NEUTRAL • Eurobank: 2Q18 results - good news across the board POSITIVE • Alpha Bank: mixed results in 2Q18 • Hellenic Petroleum: 2Q18 results - slight miss, but strong recorded earnings NEUTRAL • 11 bit: 2Q18 miss on provisions booked NEGATIVE • Consumer staples: Lidl reportedly going online in Poland NEUTRAL • AmRest: Coca-Cola to buy Costa Coffee at 16.4x 2018E EBITDA POSITIVE • PZU: additional takeawa...

Research Team

Focus: Bank Millennium’s 2Q18 – solid results support our long-term positive outlook; Akbank’s 2Q18 review – 5% beat at the net income level, and 2Q18 conference call highlights; Turkcell’s 2Q18 results – 5% EBITDA beat and guidance upgrade

HEADLINES: * Bank Millennium: 2Q18 - solid results support our long-term positive outlook POSITIVE * Akbank: 2Q18 review - 5% beat at the net income level POSITIVE * Akbank: 2Q18 conference call highlights POSITIVE * Turkcell: 2Q18 results - 5% EBITDA beat and guidance upgrade POSITIVE * Jeronimo Martins: 2Q18 results - small beat as Biedronka passed on promo costs to suppliers POSITIVE * Novatek: 2Q18 results - stronger sales, good FCF, but costs ahead of estimates * BZ WBK: takeaways from 2Q18 results meeting NEUTRAL * Orange Polska: key takeaways from 2Q18 earnings ...

Research Team

WOOD Morning (10 July)

HEADLINES: * Gazprom: takeaways from our site visit * Kruk: 2Q18 - very strong recoveries; solid investments in Poland POSITIVE * Kruk: planning to conduct a review of strategic growth options NEUTRAL * OMV Petrom: Romanian offshore tax regime passes parliament NEGATIVE * Inter Cars: June sales at PLN 681m (+28.2% yoy) POSITIVE * Jeronimo Martins: 2Q18E results preview (due on 25 July) NEUTRAL * Short News (RO politics)

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...

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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