Jeronimo Martins: Strategic Pricing and Market Developments Justify Buy Rating and Price Target Upgrade

Bernstein analyst William Woods has maintained their bullish stance on 0EXG stock, giving a Buy rating on May 9.

William Woods has given his Buy rating due to a combination of factors including the recent developments in the Polish market, where Jeronimo Martins operates its Biedronka stores. The reduction in promotional activities suggests a potential end to the intense price competition, which could positively impact the company’s margins. Additionally, although Biedronka’s pricing has increased at a slower pace than food inflation, this indicates that the company is strategically managing its pricing in a competitive environment.
Woods also anticipates that the competitive landscape will become more favorable in the coming quarters, with the gap between Biedronka’s basket inflation and the overall food inflation expected to narrow. This improvement is likely to enhance the company’s profitability, justifying an upgrade in the price target from €21 to €26, representing a 15% potential upside. The valuation metrics, including PE, EV/EBITDA, and FCF yield, further support the Buy rating, reflecting confidence in Jeronimo Martins’ financial performance and market position.

In another report released on May 9, Morgan Stanley also maintained a Buy rating on the stock with a €24.90 price target.