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Strategic Buy Signal on Metro AG (B4B-DE)

22/09/2021
We had an Enter Long Strategic signal on September 22, 2021, triggered by our system on B4B-DE, Metro, the German food retailer.

Metro is a € 3.9 Bn market cap company, which operates in wholesale and food service business. It is a dedicated food specialist with a customer base in wholesale in approximately 35 countries in Europe and Asia. The Company business is carried out by two operating segments: the METRO Wholesale segment and the Real segment. The Company operates also as a retailer in the hypermarket segment of German grocery retail market. The Company operates internationally under brands METRO and Real. The Company operates approximately 751 warehouses in 25 countries and approximately 79 delivery depots. The Company also provides foodservice distribution via Classic Fine Foods group, Rungis Express group and Pro a Pro group.

Metro raised its full-year outlook in July on better-than-expected business since the easing of COVID-19 restrictions. The company now expects full-year sales to shrink by 0.5% to 3.5%, compared with an earlier guidance of a 3%-to-6% decline.Adjusted EBITDA will come in in a range of €50 to 75 Mn.

Metro, which counts restaurants and hotels as its most important customers, said that in its fiscal Q3-21, like for-like sales grew by 15%, while adjusted EBITDA increased to about € 310 Mn.
Revenues are expected to reach €24.2 Bn in 2021 with a c. € 60 Mn net profit and to progressively recover the pre-covid level of €29 Bn in revenue coupled with a €500 Mn net profit.
Metro is clearly a « reopening stock ».

Short term catalyst : Reopening economy.

This signal looks consistent with the strong participation to the bullish momentum (both tactical and strategic) in the European retail sector (cf. Macro sector participation).