THE Bradesco BBI have the Quero-Quero stores (LJQQ3) as one of the “most attractive” growth stories within its coverage universe.
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.
“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
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.
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Source: Moneytimes
I am an author at Global happenings and I mostly cover automobile news. In my time working in the automotive industry, I have developed a keen interest in the latest developments and trends. My writing skills have also allowed me to share my knowledge with others through articles and blog posts.
