Goldman recommends selling Cencosud shares due to smaller investments than Falabella and Walmart


As a result, the retailer's role linked to Horst Paulmann fell on the Santiago Stock Exchange by 3.75% to $ 1,280.

Goldman Sachs again provided coverage to Cencosud, but it did not give him the best outlook for the company linked to Horst Paulmann. And is that the investment bank in addition to lowering the target price of the action for 12 months in 20% to $ 1,080, attributed a customers to sell the paper.

In their analysis, the investment bank indicated that they continue to "see a challenging outlook for Cencosud, which is based on a combination of internal execution, external competitiveness and macroeconomic challenges," adding that, as a consequence of the above, "a margin limited will be seen. " to accelerate mainline growth in the short term as SSS growth is likely to remain lukewarm in key operations. "

In addition, the report prepared by analyst Irma Sgarz considered that one of the greatest risks for the Chilean company is that it is left behind in relation to its investment peers.

"Competitors in traditional retail (Falabella and Walmart Chile) are aggressively investing in their omnichannel capabilities," he said, adding that, for example, Cencosud invests 62% less than Falabella in IT, logistics and others.

Regarding the above, he explained that although e-commerce may be less relevant to food retailing, "we expect competitive counter-winds to intensify, such as Free Market, Amazon and Walmart Cornershop continue to expand their offer in Chile ".

"Finally, we observed that 23% of Cencosud's revenues came from Argentina, where the environment of high inflation and a greater depreciation of potential FX could weigh on profits," he added.

As a consequence, the role of the retailer It fell on the Santiago Stock Exchange at 3.75% to $ 1,280.

To the top of Cencosud, in the same report, Goldman increased Falabella's target price in 7% to $ 5,670, in addition to delivering a neutral recommendation.

Falabella's thesis is based on the fact that they see the company "as a high-quality name throughout Latin American retail coverage, but a prospect of earnings growth that is not very encouraging and a relatively complete valuation."


Source link