B&M is showing its strength, says Liberum5 Mar 2021 06:08
Discount retailer B&M European Value Retail (BME) has raised guidance again, which Liberum says shows the strength of its proposition.
Analyst Adam Tomlinson reiterated his ‘buy’ recommendation and increased the target price from 600p to 650p on the stock, which closed down 2.1%, or 11p, at 533p on Thursday.
B&M raised its guidance for 2021 after strong trading in the final quarter of last year, as it continued to be a lockdown winner.
Tomlinson said the raised guidance ‘shows the strength of B&M’s discount, general merchandise offer and predominantly retail park sites, which have left it primed to benefit during the lockdowns, as well as being a long-term structural winner’.
‘Its value offer is driving new customer acquisition, while maintaining margin strength and delivering broad category growth,’ he said.
The analyst added that they do not see the present valuation – with the shares trading at around 16 times current financial year earnings – as stretched given the company’s momentum.