Warburg Research maintains Fielmann at 'Hold' - target EUR 49

Warburg Research has reiterated its 'Hold' rating on Fielmann, while reducing its target price from EUR 52 to EUR 49.

Analyst Christian Obst believes that while the company will continue to see growth in the medium term, its valuation has come under pressure due to macroeconomic uncertainties.

In a research note to clients, Obst noted that Fielmann's revenue increased by 8.6% year-over-year to EUR 1.8 billion in the first nine months of 2022. This growth was driven by a combination of organic growth and acquisitions, as well as a favorable product mix.

However, Obst also highlighted that Fielmann's earnings before interest and taxes (EBIT) decreased by 1.7% to EUR 220.5 million during the same period, due to higher costs and expenses. These costs included increased personnel expenses and marketing costs, as well as higher raw material prices.

Looking ahead, Obst expects Fielmann to continue to grow its revenue in the medium term, driven by its strong brand recognition, extensive store network, and focus on innovation. However, he believes that the company's profitability will be under pressure due to rising costs and increasing competition.

As a result, Obst has reduced his target price on Fielmann to EUR 49, which is still based on a sum-of-the-parts valuation. He continues to believe that Fielmann is a well-managed company with a strong market position, but that its valuation is currently stretched.