On Thursday, B&M European Value Retail SA (BME:LN) (OTC: BMRRY) maintained its Buy rating and GBP6.60 price target from Deutsche Bank, following the release of the company's full-year 2024 results, which aligned with market expectations announced on April 16. The discount retailer reported a 10.1% increase in sales, reaching £5,484 million, with adjusted EBITDA at £629 million.
By division, B&M's UK operations saw an 8.5% rise in sales to £4,410 million, with like-for-like sales up by 3.7%. This segment achieved an EBITDA margin of 12.5%, resulting in £556 million in EBITDA. Heron Foods, part of the B&M group, experienced a 15.3% increase in sales, while the company's France segment reported a 19.2% surge, with a 9.1% EBITDA margin leading to £47 million in EBITDA.
Deutsche Bank highlighted the importance of space growth for B&M's investment case over the coming years, noting that while the company still aims for like-for-like growth, expanding its retail space will be a more significant driver. The analyst pointed out that B&M's stock appears undervalued, trading at around 14 times price-to-earnings and offering a circa 6% free cash flow yield, which is attractive given the high single-digit percentage expected earnings per share growth.
The financial institution did not provide a current trading update or explicit guidance for the fiscal year 2025, which had been previously communicated. B&M's performance indicates a steady trajectory as the retailer continues to expand its market presence amidst competitive retail landscapes.
InvestingPro Insights
As B&M European Value Retail SA (BME:LN) (OTC: BMRRY) secures a positive outlook from Deutsche Bank, real-time data from InvestingPro further enriches the investment narrative. With a market capitalization of $6.39 billion, B&M is trading at a P/E ratio of 13.64, close to the Deutsche Bank's valuation. A noteworthy InvestingPro Tip is B&M's dividend yield, currently at a substantial 7.61%, reflecting the company's commitment to returning value to shareholders, having maintained dividend payments for 11 consecutive years.
Another InvestingPro Tip for B&M is its robust sales growth, with the last twelve months as of Q4 2024 showing a revenue increase of 10.05%. This aligns with the company's reported full-year results and supports the analyst's perspective on the company's growth trajectory. Moreover, B&M's strong return on assets of 10.18% over the same period underscores its efficient use of resources.
Investors seeking more insights can find additional InvestingPro Tips by visiting the B&M page on Investing.com. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking valuable information to guide investment decisions.
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