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Oct 19 2017, 06:30 IST/BST
Applegreen’s convenience retail proposition is a unique differentiator versus peers. It has facilitated rapid site growth in a consolidating forecourt market, delivering 15% EBIT CAGR in 2012-2016. We are forecasting a similar rate of growth for 2017-2019E, but central to our investment thesis is that this could prove conservative – we are particularly excited about prospects in the US market. The group also has the balance sheet to support material future investment, with leverage at just 0.7x net debt/EBITDA 2017E. We are reinitiating coverage with an ‘Outperform’ rating and a price target of €7.20, suggesting 25% upside. Our blue sky valuation points to over 50% upside.