On Thursday, Kepler Cheuvreux made a bullish turn on Fnac Darty SA (FNAC:FP), upgrading the stock from Hold to Buy and increasing the price target to €42.00, up from the previous €30.00. The firm's outlook for the retailer is optimistic, citing an anticipated recovery in product volumes and improving macroeconomic conditions as key drivers for the upgrade.
According to Kepler Cheuvreux, Fnac Darty is poised to enjoy benefits from margin tailwinds as sales volumes pick up and inflation pressures subside. The potential acquisition of Unieuro by Fnac Darty is also seen as a positive move, with expected synergies likely to enhance earnings per share (EPS) growth. The firm projects a 28% adjusted EPS compound annual growth rate (CAGR) for Fnac Darty post-acquisition over the forecast period of FY 2024-26E.
The analyst's commentary underscores the expectation that the combined effects of a volume rebound, easing inflation, and the Unieuro acquisition will contribute significantly to Fnac Darty's financial performance. These factors are anticipated to act as catalysts for the company's share price appreciation in the near future.
The upgrade reflects a confidence in Fnac Darty's strategic initiatives and its ability to capitalize on market conditions. Kepler Cheuvreux's new price target of €42.00 represents a substantial increase from the previous target, signaling a strong conviction in the company's growth trajectory and value proposition to investors.
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