Porinju Veliyath Reco Future Retail up 14% On Morgan Stanley Buy Report

Here we track the latest buys and sales and portfolios of famous investors
Post Reply
Pee Vee
Site Admin
Posts: 453
Joined: Mon Dec 26, 2016 10:45 pm

Porinju Veliyath Reco Future Retail up 14% On Morgan Stanley Buy Report

Post by Pee Vee »

Morgan Stanley has initiated coverage on Future Retail with an overweight rating and price target of Rs 340 as it has high conviction on strong earnings growth potential of the company after recent restructuring.

Porinju has recommended Future Consumer, Future Retail and Future Enterprises for buy. Stock is already multibagger.

Morgan Stanley says in the context of its CAGR estimates of 30 percent for EBITDA and 31 percent for PAT during FY17-20, suggesting consistent earnings delivery, it believes the multiples offer material upside. Its price target implies more than 40 percent upside potential.

Morgan Stanley expects three pillars to support earnings growth, which are acceleration in same-store sales growth led by improved merchandise design/quality and lower competitive intensity; margin expansion driven by product mix improvement, a focus on private label, plus scale benefits; and further improvement in capital efficiency.

It sees upside risks to base-case estimates on account of GST implementation, further optimisation of the Future Retail balance sheet, sharp improvement in operating performance as indicated in 9MF17 results, and profitable expansion of the convenience store model.

http://www.moneycontrol.com/news/buzzin ... 67821.html
Post Reply