Share Prices & Company Research

Market News

16 Mar 2021 | 10:35

Berenberg initiates coverage on B&M at 'buy'

(Sharecast News) - Analysts at Berenberg initiated coverage on discount retailer B&M at 'buy' on Tuesday, stating that the group had been and appeared set to remain a "Covid-19 beneficiary". Berenberg said it believes B&M will be a post-Covid-19 winner, offering one of the strongest top-line growth and return on invested capital profiles in European retail, while its cash-generative business should also support additional capital returns.

"We believe the recent share price pullback has provided an attractive entry point into a structural winner," said Berenberg, which issued the stock with a 600.0p target price.

On the German bank's estimates, B&M trades on a 15.6x 2022 price-to-earnings ratio, something it branded "a justified premium to UK and European retail peers" given its superior ROIC and scope for additional capital returns.

Berenberg also stated market share and customer gains would support B&M's growth step-up, with consensus estimates expecting the group to deliver roughly 21% like-for-like growth in 2021.

The analysts acknowledged this creates "a challenging comparable", but they also believe the growth step-up can be sustained, supported by four growth drivers - the outperformance of the value retail market, market share gains from underperforming value retail peers, incremental customer gains and space growth providing roughly 5-6% growth per annum.
Get in touch today
Join Redmayne Bentley
Talk to us now about opening a new account or transferring your account from another provider
0113 243 6941
Get in touch today
Contact your local office
Contact your local office to find out more
The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.
Continuing our Personal Service: View our Latest COVID-19 Update: 7th October 2021
We use cookies on this site to improve your experience and help us provide you with a better website. An explanation of the cookies we use and their purpose can be found within our Cookie Policy. Your continued use of this site means you consent to the use of cookies.