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BME Share News - London Briefing.

Possibly Morgan Stanley cutting to underweight with price target of 4.33. I don't have a great deal of faith in broker ratings however, some are quoting 6.50. Do your own research.

Marketing Week:

Alex Russo told Marketing Week “the choice would be simple” if he had to choose between investing in pricing or a marketing campaign. “I would put it into pricing,” he said. “We are very aggressive on social media, which is free, but we don’t spend money on marketing. We create content.”

According to Russo, B&M is delivering “volume-led momentum”, with profits ahead of both pandemic and pre-pandemic benchmarks. Crediting the company’s “laser focus on low prices”, the B&M CEO claimed sustained volume growth is improving the retailer’s relationships with FMCG branded suppliers, reinforcing its position as the “fastest growing major customer for many.”

Like-for-like sales were also up 3.7%, compared with rival Poundland which reported a -2.8% sales decline for the same period.

With both retailers having focused on store rollouts over the past year, retail analyst at GlobalData, Sophie Mitchell, says this indicates B&M is “winning over consumers with its prices and product range”, while the retailer’s like-for-like performance suggests its stores will remain successful after their ‘honeymoon’ period.

Investors Chronicle:

In its last financial year, the group announced a new long-term target of “not less than 1,200” B&M UK shops – up from 950.

According to analysts at Peel Hunt, one of B&M’s strengths is its ability to draw in customers when it moves into a new area. “Unlike at other retailers, where it takes a while for new stores to reach maturity, that process is almost instant here – and cash payback is less than a year,” they said.

The story is much the same in the group’s French division and its supermarket subsidiary Heron Foods. However, we don’t think the group’s potential is fully reflected in its 12.5 times forward earnings multiple just yet, meaning the shares are good value. Buy.

Yes, very reassuring. Nice to be able to add more this morning under £5.00.

But RBC are very bullish according to that proactiveinvestors report.

Anyway, I for one, added more b&m this morning, looks compelling to me.

Yes, they downgrade, target price down to 513p

Can you ever trust any of the brokers?!!!

RBC raised their rating to outperform with revised target up from 615p to 650p.

The markets seem to like the possibility of b&m acquiring wilko

I agree, it's still speculative.

This recent run has me firmly in profit after passing the break even point a month ago. We've been here before so the decision now is whether to hold or take profits. Tricky!

I'm encouraged by the performance of Heron and in France and still believe a special dividend is likely later this year.

Investors Chronicle: "Stores in France are also proving popular, with sales up 29 per cent. Chief executive Alex Russo said the group remains “relentlessly focused on price, product and excellence in retail standards”.

Well said, totally agree.

Bit of a surprise with the initial market reaction.

Peel Hunt noted “the shares have had a great run but we are slightly concerned about valuation, so stick with a hold.”

Shore Capital also kept its hold rating. “We remain cautious due to the increasingly challenging year-on-year comparisons expected for the remainder of the year, a worrisome increase in shrinkage, and the potential need for price adjustments to support low-income UK consumers,” it said.

No-one knows for sure but signs are positive to at least keep at these levels. Tomorrow's update should give an indication.

Bank of America raised it's target price to £6.75 today.

There's a trading update due on Thursday. This what Proactive Investors says:

"B&M European Value Retail is another of this week’s stocks on the rise, edging back towards all-time highs after announcing last month that sales for the first nine weeks of the financial year were up by 8.3%.

Analysts said the update put to bed any concerns about an easing of the trend towards trading down and expects confirmation of healthy trading in Thursday’s trading update"

Back above the 52 week high, looking positive.

"With momentum heading in the right direction, and 60 new stores expected to open this year, the growth strategy remains enticing. Buy."

It seems consensus is very positive right now with further rise this morning, also bullish broker ratings.

Barclays - overweight, target 565p

Goldman Sachs - buy, target 650p

Sp touching 5.00 again despite the general markets being down today.

Nice sp reaction to todays announcement, results in line with estimates, divi as expected. Positive sentiment for growth in the coming year. If sales and profit also rise as expected a good special divi should be forthcoming.

Maintaining a fairly substantial holding with a small percentage for trading.