Fact based stock research
B&M European Value Retail (LSE:BME)

LU1072616219

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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B&M European Value Retail stock research in summary

bandmretail.com

ANALYSIS: With an Obermatt Combined Rank of 60 (better than 60% compared with investment alternatives), B&M European Value Retail (General Merchandise Stores, Luxembourg) shares have above-average financial characteristics compared with similar stocks. Shares of B&M European Value Retail are a good value (attractively priced) with a consolidated Value Rank of 54 (better than 54% of alternatives) but show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 47), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 60, is a buy recommendation based on B&M European Value Retail's financial characteristics. As the company B&M European Value Retail's key financial metrics exhibit good value (Obermatt Value Rank of 54) but low growth (Obermatt Growth Rank of 49) and risky financing practices (Obermatt Safety Rank of 47), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 54% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	54
Growth Rank	49
Safety Rank	47
Combined Rank	60

Country	Luxembourg
Industry	General Merchandise Stores
Index	FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe
Size class	X-Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: B&M European Value Retail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	58	57	22	54
GROWTH
GROWTH	95	61	95	49
SAFETY
SAFETY	63	47	42	47
SENTIMENT
SENTIMENT	n/a	95	86	^new
360° VIEW
360° VIEW	n/a	93	85	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better B&M European Value Retail is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	58	57	22	54
GROWTH
GROWTH	95	61	95	49
SAFETY
SAFETY	63	47	42	47
COMBINED
COMBINED	79	64	71	60

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of B&M European Value Retail the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 54 (better than 54% compared with alternatives), B&M European Value Retail shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for B&M European Value Retail. Price-to-Profit (also referred to as price-earnings, P/E) is 75 which means that the stock price compared with what market professionals expect for future profits is lower than for 75% of comparable companies, indicating a good value concerning B&M European Value Retail's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 17, which means that the stock price is lower as regards to invested capital than for 17% of comparable investments. On the other hand, Price-to-Sales is less favorable than 71% of alternatives (only 29% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 12% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 54, is a buy recommendation based on B&M European Value Retail's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	54	38	19	29
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	85	56	41	75
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	6	18	8	17
DIVIDEND YIELD
DIVIDEND YIELD	80	90	74	88
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	58	57	22	54

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of B&M European Value Retail; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), B&M European Value Retail shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for B&M European Value Retail. Sales Growth has a rank of 71 which means that currently, professionals expect the company to grow more than 71% of its competitors. Capital Growth is also above 38% of competitors with a rank of 52. But Profit Growth only has a rank of 38, which means that currently professionals expect the company to grow its profits less than 62% of its competitors. And Stock Returns have also been below average with a rank of only 18. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	93	39	73	71
PROFIT GROWTH
PROFIT GROWTH	71	30	53	38
CAPITAL GROWTH
CAPITAL GROWTH	n/a	74	85	52
STOCK RETURNS
STOCK RETURNS	80	73	86	18
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	95	61	95	49

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of B&M European Value Retail.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 47 (better than 47% compared with alternatives), the company B&M European Value Retail has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of B&M European Value Retail is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for B&M European Value Retail. Refinancing is at 50, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 50% of its competitors. Liquidity is also good at 71, meaning the company generates more profit to service its debt than 71% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 15, which means the company has an above-average debt-to-equity ratio. It has more debt than 85% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 47 (worse than 53% compared with alternatives), B&M European Value Retail has a financing structure that is riskier than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and B&M European Value Retail could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with B&M European Value Retail and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	48	25	17	15
REFINANCING
REFINANCING	73	33	48	50
LIQUIDITY
LIQUIDITY	61	76	73	71
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	63	47	42	47

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of B&M European Value Retail and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	13	47	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	98	64	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	96	96	^new
MARKET PULSE
MARKET PULSE	n/a	62	69	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	95	86	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for B&M European Value Retail.
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