HERFY FOODS
6002
6002
EFG-Hermes issued a report on Saudi Arabia’s Herfy Food Services, raising the stock’s fair value by 14% to SAR119/share (21% upside) as it accounts for a major pick-up in short-term store additions and better same-store-sales (SSS) growth.
“Accordingly, we expect the acceleration in recurring earnings growth seen in 3Q2014 (+15% Y-o-Y versus 1% on average in the prior five quarters) to sustain through FY2015 (+18% Y-o-Y),” said EFG.
The research firm also upgraded Herfy to Buy from Neutral as the company’s historically solid growth prospects are coming back into play, coupled with its impressive profitability profile. Moreover, the stock trades at a 2015e P/E of 19x, unwarrantedly lower than peers’ average c24x.
“Accordingly, we expect the acceleration in recurring earnings growth seen in 3Q2014 (+15% Y-o-Y versus 1% on average in the prior five quarters) to sustain through FY2015 (+18% Y-o-Y),” said EFG.
The research firm also upgraded Herfy to Buy from Neutral as the company’s historically solid growth prospects are coming back into play, coupled with its impressive profitability profile. Moreover, the stock trades at a 2015e P/E of 19x, unwarrantedly lower than peers’ average c24x.
Source:
Mubasher
