Publicação
Equity research Jerónimo Martins SGPS S.A. : using the expected effect of the macroeconomic indicators
| Resumo: | Jeronimo Martins is the biggest Portuguese food retailer ever. Mainly operates through supermarket and cash & carry formats. The activity spans to Portugal, Poland and Colombia, being the supermarket and cash & carry leader in Portugal, and the supermarket leader in Poland. It is expanding its private label assortment wherever it operates, controlling the supply chain. With a Sum-of-Parts (SoP) approach, where a FCFF DCF was performed for each business unit, a price target of 24.9€/sh for 2023YE was attained, considering medium-low risk. This translates into a BUY recommendation with 22% upside against the closing price of 20.4€/sh on January 13th, 2023. Other methods were also used to support the valuation, such as Multiples (SoP and group), FCFF DCF (group), APV, Residual Income, and the DDM. Real Options valuation was used to address the possible expansion scenarios into Romania. Stress tests and sensitivity analysis are presented to address risk factors to the price target. The main risks faced by the company are subject to discussion in the report. This document contains an extended chapter that investigates how revenues can be forecasted using external factors to the company, using several macroeconomic indicators through econometrics. A revised target price of 23.8€/sh was achieved. |
|---|---|
| Autores principais: | Dias, Gonçalo Alexandre Simão |
| Assunto: | Equity Research Valuation DCF APV DDM FCFF WACC Modelling Food Retail Supply Chain Expansion Plan Real Options Avaliação de Empresas DFC VAA MDD Custo do Capital Modelação Financeira Retalho Alimentar Abastecimento Expansão Opções Reais |
| Ano: | 2023 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório da Universidade de Lisboa |
| Resumo: | Jeronimo Martins is the biggest Portuguese food retailer ever. Mainly operates through supermarket and cash & carry formats. The activity spans to Portugal, Poland and Colombia, being the supermarket and cash & carry leader in Portugal, and the supermarket leader in Poland. It is expanding its private label assortment wherever it operates, controlling the supply chain. With a Sum-of-Parts (SoP) approach, where a FCFF DCF was performed for each business unit, a price target of 24.9€/sh for 2023YE was attained, considering medium-low risk. This translates into a BUY recommendation with 22% upside against the closing price of 20.4€/sh on January 13th, 2023. Other methods were also used to support the valuation, such as Multiples (SoP and group), FCFF DCF (group), APV, Residual Income, and the DDM. Real Options valuation was used to address the possible expansion scenarios into Romania. Stress tests and sensitivity analysis are presented to address risk factors to the price target. The main risks faced by the company are subject to discussion in the report. This document contains an extended chapter that investigates how revenues can be forecasted using external factors to the company, using several macroeconomic indicators through econometrics. A revised target price of 23.8€/sh was achieved. |
|---|