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Jan 26 2018, 06:45 GMT
Alimentation Couche-Tard Inc. (Couche-Tard), the world’s largest convenience forecourt retailer, held its first Capital Markets Day (CMD) this week. We think the event lends material weight to Applegreen’s acquisition-led food focused strategy. Couche-Tard also noted a preference for deploying capital in North America, which is relevant as we would not be surprised if the US was Applegreen’s largest contributor to profits in 5-10 years. Finally, we note that it took Couche-Tard 20 years to grow from 500 to 15,000 sites. Applegreen is on track to reach almost 400 sites this year and has the balance sheet to support material future investment. This business has the potential to rapidly scale up in size over the medium term. We reiterate our ‘Outperform’ recommendation and price target of €7.20; blue sky >50%.