AlsterResearch Update: Ceconomy - Uncertainties clouding the short-term

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What’s it all about?

The upcoming holiday shopping season is the most important season for retail. As for Ceconomy, the company makes a third of the full-year revenues in the current quarter. With increasingly restrictive COVID-measures in Ceconomy’s markets due to the worsening situation, we believe that the company’s stationary business will suffer from less customer traffic, ultimately impacting sales. While the online business might compensate somewhat, supply chain issues and increased costs could weigh on the bottom-line. Due to the short-term gloom, we lower our estimates. Supported by adj. FCF yield 2021/22E, we lower our PT to EUR 5.50. Due to the continuous lack of visibility we remain more conservative than our DCF based fair value calculation. Our recommendations remains with BUY.