Citi reiterates 'buy' on 3i Group, opens 'upside catalyst watch'

(Sharecast News) - Citi reiterated its 'buy' rating on 3i Group on Tuesday and opened an 'upside catalyst watch' on the shares as it noted that slowing like-for-like growth at portfolio holding Action has driven 40% underperformance in the past six months. The bank noted that 3i Group trades around 15% below its March 2026 NAV estimate, with Action's implied valuation on 20x Citi's 2027 net income estimate.

"The shares discount 3-4% LFL growth over the medium-term, requiring 1-2% LFL sales growth for mature stores," it said.

"We expect slowing LFL growth to prove temporary, with rising inflation and consumer pressure instead reinforcing shifts towards discounted channels."

Citi said its white space analysis suggests further upgrades at the Action capital markets day on 26 March, where it expects a 2027 US launch to be announced, alongside Bulgaria. Action is a Dutch discount retailer.

The bank cut its price target on 3i to 4,280p.