BUZZ-Jefferies views food margins for Metcash sustainable but flags operational risks

Reuters
2024-12-11
BUZZ-Jefferies views food margins for Metcash sustainable but flags operational risks

** Jefferies recommends "hold" on Aussie retailer Metcash MTS.AX

** Sees EBIT margins declining since FY22/FY23 due to disinflation, cost inflation and theft, but continues to remain at healthy levels

** Brokerage sees moderating food inflation a near-term challenge to co

** Hardware business impacted due to operating deleverage resulting from weak building activity — Jefferies

** Brokerage sees solid margins, return on capital employed (ROCE) and low debt as positives

** Maintains PT of A$3.40, compared to last closing price of A$3.31

** 7 of 12 analysts rate the stock "buy" or higher, 4 "hold" and 1 "sell"; their median PT is A$3.70 — LSEG

(Reporting by Nichiket Sunil in Bengaluru)

((Nichiket.Sunil@thomsonreuters.com))

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