24.4 C
New York
Tuesday, June 28, 2022
More

    Latest Posts

    Growth-hungry retail stock could soar by nearly 90%, estimates BBI

    - Advertisement -
    Quero-Quero’s shares have an attractive valuation, say analysts (Image: Disclosure/Lojas Quero-Quero)

    THE Bradesco BBI have the Quero-Quero stores (LJQQ3) as one of the “most attractive” growth stories within its coverage universe.

    Ads

    Despite short-term pressures, mainly on margins due to interest rate hikes, analysts see the stock with a valuation attractive, trading at a multiple of approximately 13 times P/E (price over earnings) for 2023.

    - Advertisement -

    “We view its assessment by the 2023 P/E multiple of around 13x as attractive for a company that is expected to deliver an average annual earnings growth rate of around 27% over the next three years,” says Richard Cathcart of BBI, and Flávia Meireles, from Agora Investmentsin a report released last week.

    The institution has a buy recommendation and a target price of R$16 for the Quero-Quero share at the end of 2022. This means that the share has the potential to soar by almost 90%, considering the closing price this Tuesday (24th). ).

    Green light for expansion

    - Advertisement -

    According to BBI, Quero-Quero offers a store value proposition that is suitable and adaptable to each region in which it operates through an offer based on four formats (Traditional and “More Construction I, II and III”), with different sizes and assortments.

    The company takes several factors into consideration when implementing a store format in a certain target neighborhood, making the expansion process more accurate, says the BBI.

    The close relationship with customers is also another characteristic of the company’s business model, highlights the institution, since the retailer operates in smaller cities.

    “Once the Quero-Quero store is established in the community, it is able to build a loyal customer base over time,” comment the analysts.

    BBI also highlights the innovation of the “figital” of operations and the construction of an efficient and scalable logistics operation, with high frequency and density in the delivery routes of the distribution centers.

    BBI expects the store expansion strategy to add around 10 percentage points to the company’s annual growth over the next five years, supported by complementary features such as figital and credit offering.

    Receive Money Times newsletters!

    Sign up for our newsletters and be always well informed with news that enrich your day! THE Money Times brings 8 curatorships covering the main themes of the market. Register now and receive the information directly in your email. It’s free!

    Disclaimer

    THE Money Times publishes informative articles of a journalistic nature. This publication does not constitute an investment recommendation.

    Ads

    Source: Moneytimes

    - Advertisement -
    spot_img

    Latest Posts

    spot_img

    Don't Miss