| B&M European Value Retail SA (LU1072616219) | |||
2,78 GBXStand (close): 03.07.25 |
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| 26.06.25 05:21:34 | Some Investors May Be Willing To Look Past B&M European Value Retail's (LON:BME) Soft Earnings |  |
| Investors were disappointed with the weak earnings posted by B&M European Value Retail S.A. (LON:BME ). Despite the soft profit numbers, our analysis has optimistic about the overall quality of the income statement. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.LSE:BME Earnings and Revenue History June 26th 2025 A Closer Look At B&M European Value Retail's Earnings As finance nerds would already know, the accrual ratio from cashflow is a key measure for assessing how well a company's free cash flow (FCF) matches its profit. In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. The ratio shows us how much a company's profit exceeds its FCF. That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future". B&M European Value Retail has an accrual ratio of -0.15 for the year to March 2025. That implies it has very good cash conversion, and that its earnings in the last year actually significantly understate its free cash flow. To wit, it produced free cash flow of UK£542m during the period, dwarfing its reported profit of UK£319.0m. B&M European Value Retail's free cash flow actually declined over the last year, which is disappointing, like non-biodegradable balloons. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Our Take On B&M European Value Retail's Profit Performance As we discussed above, B&M European Value Retail has perfectly satisfactory free cash flow relative to profit. Because of this, we think B&M European Value Retail's earnings potential is at least as good as it seems, and maybe even better! On the other hand, its EPS actually shrunk in the last twelve months. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. So while earnings quality is important, it's equally important to consider the risks facing B&M European Value Retail at this point in time. In terms of investment risks, we've identified 2 warning signs with B&M European Value Retail, and understanding these should be part of your investment process. Story continues This note has only looked at a single factor that sheds light on the nature of B&M European Value Retail's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. — Weekly Picks from Community Investing narratives with Fair Values A case for TSXV:USA to reach USD $5.00 - $9.00 (CAD $7.30–$12.29) by 2029. By Agricola – Community Contributor Fair Value Estimated: CA$12.29 · 0.9% Overvalued DLocal's Future Growth Fueled by 35% Revenue and Profit Margin Boosts By WynnLevi – Community Contributor Fair Value Estimated: $195.39 · 0.9% Overvalued Historically Cheap, but the Margin of Safety Is Still Thin By Mandelman – Community Contributor Fair Value Estimated: SEK232.58 · 0.2% Overvalued View more featured narratives — Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View comments |
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| 19.06.25 15:32:28 | B&M CFO Michael Schmidt buys nearly £20,000 in company shares |  |
| LONDON - B&M European Value Retail S.A. (LSE:BME) Chief Financial Officer Michael Schmidt purchased 7,415 ordinary shares in the company at a price of £2.69521 per share, according to a regulatory filing released Thursday. The transaction, which took place on Wednesday, amounted to a total investment of £19,984.98. The shares were acquired on the London Stock Exchange (LON:LSEG) Main Market. The notification was made in accordance with market regulations requiring persons discharging managerial responsibilities to disclose transactions in their company’s securities. B&M European Value Retail S.A., headquartered in Luxembourg, operates a chain of discount retail stores across the United Kingdom and France. The company is listed on the London Stock Exchange. The information was disclosed in a regulatory news service filing submitted to the London Stock Exchange. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. |
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| 15.04.25 17:52:32 | B&M European Value Retail (LSE:BME) Reports £5.6 Billion Revenue With Mixed LFL Performance | |
| B&M European Value Retail reported revenue growth of 4% constant currency for the fiscal year ending in March 2025, with strong performance from new store openings and sales in France. Despite negative like-for-like sales in the UK and Heron Foods, the company's overall results may have strengthened investor confidence, coinciding with a 13% share price increase over the past month. This rise mirrors a positive market sentiment seen with the broader market experiencing gains, as evidenced by rallies in U.S. indices, driven by strong performances in tech and banking sectors and easing of trade tensions. You should learn about the 2 warning signs we've spotted with B&M European Value Retail.LSE:BME Earnings Per Share Growth as at Apr 2025 Outshine the giants: these 25 early-stage AI stocks could fund your retirement. The recent news of B&M European Value Retail's 4% revenue growth, supported by new store openings and strong sales in France, complements the narrative of store expansion and cost management as key drivers for enhancing revenue and margins. These factors align with the company's strategic efforts to boost shareholder value through cash returns including buybacks and dividends. Despite some challenges in the UK and Heron Foods, this positive performance may bolster revenue and earnings forecasts, potentially justifying analyst projections for the coming years. Over a five-year period, the company's total return, including dividends, was 39.53%, offering a balanced view of its long-term performance. Relative to the broader market, B&M underperformed the UK Market with its 1-year return below the market's performance, which experienced a slight decline. However, the recent 13% share price increase reflects growing investor confidence, aligning closer to the consensus analyst price target of £4.30, which is significantly higher than the current £2.85 share price. Such an increase could indicate potential for further growth if the company continues to efficiently execute its expansion and cost-saving strategies. The analysis detailed in our B&M European Value Retail valuation report hints at an deflated share price compared to its estimated value. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Story Continues Companies discussed in this article include LSE:BME. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com View Comments |
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| 15.04.25 08:47:09 | Trending tickers: Netflix, Meta, Ford, LVMH and B&M | |
| Netflix (NFLX) Shares in Netflix rose in pre-market trading after company executives outlined ambitious long-term goals, including a market valuation of $1trn by the end of the decade. NasdaqGS - Delayed Quote•USD (NFLX) Follow View Quote Details 931.28 - +(1.41%) At close: April 14 at 4:00:00 PM EDT Advanced Chart The streaming giant, which is due to report first-quarter earnings on Thursday, has forecast an 11% increase in revenue for the opening quarter of 2025. On a foreign-exchange neutral basis, that equates to 14% growth — slightly below full-year guidance due to the timing of recent price increases and seasonal trends in its advertising business. Netflix expects total revenues for the quarter to reach $10.416bn, representing a year-on-year increase of 11.2%. Analysts, however, are projecting slightly higher revenues of $10.54bn, reflecting anticipated growth of 12.5%. According to The Wall Street Journal, Netflix executives shared their long-term strategic goals in a recent internal meeting, including plans to double annual revenue and triple operating income by 2030. Citing individuals familiar with the meeting, the report said Netflix aims to grow revenues from $39bn last year to nearly $80bn by the end of the decade. Read more: FTSE 100 LIVE: Stocks rise as JD Vance says 'good chance' of UK trade deal The company also has aggressive targets for its advertising business, forecasting global ad revenues to reach $9bn, up sharply from the $2.15bn generated in the US alone. Meta (META) Meta shares slipped in pre-market trading as chief executive Mark Zuckerberg took the stand to defend the company against antitrust allegations brought by the US Federal Trade Commission. NasdaqGS - Delayed Quote•USD (META) Follow View Quote Details 531.48 - (-2.22%) At close: April 14 at 4:00:01 PM EDT Advanced Chart “They decided that competition was too hard and it would be easier to buy out their rivals than to compete with them,” FTC lawyer Daniel Matheson told the court. Meta, which purchased Instagram for $1bn in 2012 and WhatsApp for $19bn two years later, dismissed the lawsuit as “misguided,” noting that both acquisitions were reviewed and approved by regulators at the time. A ruling in favour of the FTC could have sweeping consequences for the tech giant, potentially forcing Zuckerberg to break up the company. That could include spinning off Instagram and WhatsApp — two platforms that are now central to Meta’s global advertising business. Meta relies on the 3.3 billion daily users it claims across its platforms as one of the core selling points of its ad business, which last year alone raked in more than $160bn in revenue. But the government argued repeatedly in opening statements that Meta’s large user base reflected not simple success, but a lack of choice, saying that “consumers do not have reasonable alternatives” to Meta’s platforms. Story Continues Ford (F) Shares in the major US automaker fell into correction territory ahead of Tuesday’s US opening bell, reversing gains from the previous session when investor optimism around potential tariff exemptions briefly lifted sentiment across the sector. NYSE - Delayed Quote•USD (F) Follow View Quote Details 9.71 - +(4.07%) At close: April 14 at 4:00:20 PM EDT Advanced Chart The automakers “need a little bit of time” to move their production to the US, Trump said during a meeting on Monday with Salvadoran president Nayib Bukele in the Oval Office. “I’m looking for something to help some of the car companies, where they’re switching to parts that were made in Canada, Mexico and other places, and they need a little bit of time, because they’re going to make them here,” Trump said. “But they need a little bit of time, so I’m talking about things like that.” Trump’s 25% tariff on foreign-made vehicle imports came into effect on April 3 and is set to extend to imported automotive parts in early May, raising concerns throughout the industry over rising costs and supply chain disruptions. Read more:Stocks to watch this week: Goldman Sachs, TSMC, ASML, Netflix, LVMH and Sainsbury's “The current Trump tariffs could change the paradigm for the US auto industry for years to come,” wrote Dan Ives, an analyst at Wedbush Securities. He estimated that the tariffs would add around $100bn in annual costs to the sector — a burden he expects to be passed directly onto consumers. According to Wedbush projections, new vehicle sales could drop by as much as 15% to 20% in 2025 due to what Ives described as “demand destruction.” He also warned that the average price of a car could rise between $5,000 and $15,000 as manufacturers pass on the additional expense. LVMH (MC.PA) Shares in LVMH fell sharply on Tuesday after the world’s largest luxury group reported weaker-than-expected first-quarter sales, as soft demand in the US and continued sluggishness in China raised fresh concerns about the resilience of the luxury sector. The group’s shares dropped over 7% in early Paris trading, following a 3% decline in quarterly revenues — a miss against analysts’ expectations for 2% growth. The disappointing results provide an early indication that 2025 could prove challenging for luxury companies, already grappling with heightened macroeconomic uncertainty and the potential fallout from Trump’s announced tariffs, which have stoked recession fears. LVMH, whose brands include Louis Vuitton and Dom Pérignon and is controlled by Europe’s richest man, Bernard Arnault, generates roughly a quarter of its revenue in the US. The group said sales in the US fell 3% in the first quarter, with American consumers pulling back on beauty and spirits purchases. In Asia (excluding Japan), sales slumped 11%. "We all need to ... stay very calm because we are in unknown territories," LVMH's chief financial officer Cecile Cabanis told analysts. "The worst is never certain." Total group sales for the three months to the end of March came in at €20.3bn. "Investor concerns around underlying demand recovery are likely to be amplified based on these results," said analysts at RBC, adding that further earnings cuts are likely, because of tariff-related risks. Louis Vuitton, its biggest brand, still outperformed the division while Dior continued to lag, Cabanis said. Analysts at Bernstein noted that creative changes at Dior have been “slow to appear”. B&M (BME.L) Shares in B&M European Value Retail rose on Tuesday after the discount chain issued a year-end trading update, narrowing its profit guidance and said a new chief executive will be announced "in the coming weeks". The company said it expects earnings for the year to March to come in "above the midpoint" of its previously downgraded guidance range of £605m to £625m, issued in February following a profit warning. The upbeat revision came alongside confirmation that a new chief executive will be named “in the coming weeks”. While like-for-like sales in the UK fell 3.1% over the full year — including a 1.8% decline in the fourth quarter — the company’s French operations delivered a stronger performance. Revenues in France rose 7.8% for the year, with same-store sales up 2.6%. Fourth-quarter growth in France reached 9.1%, offering a bright spot in an otherwise mixed update. Stocks: Create your watchlist and portfolio In line with previous guidance, B&M opened 45 new UK stores during the year, which the company reports are “performing in line with our expectations and are generating strong returns.” The group maintains a robust pipeline for the coming year, with plans for another 45 new store openings. B&M, which sells everything from hats and heaters to toys and food, operates more than 1,100 stores across the UK and France under its eponymous brand and Heron Foods. Other companies in the news on Tuesday 5 April IntegraFin Holdings (IHP.L) S & U (SUS.L) Everyman Media (EMAN.L) Accesso Technology (ACSO.L) Rio Tinto (RIO.L) LM Ericsson (ERIC) Bank of America (BAC) United Airlines (UAL) Citigroup (C) Newcore Gold (NCAUF) Johnson & Johnson (JNJ) Albertsons (ACI) Download the Yahoo Finance app, available for Apple and Android. View Comments |
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| 04.04.25 05:01:02 | B&M European Value Retail S.A.'s (LON:BME) Intrinsic Value Is Potentially 90% Above Its Share Price | |
| Key Insights Using the 2 Stage Free Cash Flow to Equity, B&M European Value Retail fair value estimate is UK£5.40 B&M European Value Retail is estimated to be 47% undervalued based on current share price of UK£2.84 Analyst price target for BME is UK£4.44 which is 18% below our fair value estimate Today we'll do a simple run through of a valuation method used to estimate the attractiveness of B&M European Value Retail S.A. (LON:BME) as an investment opportunity by taking the expected future cash flows and discounting them to their present value. This will be done using the Discounted Cash Flow (DCF) model. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow. Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Crunching The Numbers We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value: 10-year free cash flow (FCF) forecast 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (£, Millions) UK£273.3m UK£305.0m UK£328.0m UK£349.0m UK£386.0m UK£409.5m UK£429.8m UK£447.7m UK£463.8m UK£478.7m Growth Rate Estimate Source Analyst x7 Analyst x7 Analyst x5 Analyst x1 Analyst x1 Est @ 6.09% Est @ 4.95% Est @ 4.16% Est @ 3.60% Est @ 3.21% Present Value (£, Millions) Discounted @ 9.1% UK£251 UK£256 UK£253 UK£247 UK£250 UK£243 UK£234 UK£224 UK£213 UK£201 ("Est" = FCF growth rate estimated by Simply Wall St) Present Value of 10-year Cash Flow (PVCF) = UK£2.4b Story Continues We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.3%. We discount the terminal cash flows to today's value at a cost of equity of 9.1%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = UK£479m× (1 + 2.3%) ÷ (9.1%– 2.3%) = UK£7.3b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= UK£7.3b÷ ( 1 + 9.1%)10= UK£3.0b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is UK£5.4b. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of UK£2.8, the company appears quite good value at a 47% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.LSE:BME Discounted Cash Flow April 4th 2025 The Assumptions The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at B&M European Value Retail as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.1%, which is based on a levered beta of 1.559. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for B&M European Value Retail SWOT Analysis for B&M European Value Retail Strength Debt is well covered by earnings and cashflows. Dividends are covered by earnings and cash flows. Dividend is in the top 25% of dividend payers in the market. Weakness Earnings declined over the past year. Opportunity Annual revenue is forecast to grow faster than the British market. Good value based on P/E ratio and estimated fair value. Significant insider buying over the past 3 months. Threat Annual earnings are forecast to grow slower than the British market. Next Steps: Although the valuation of a company is important, it shouldn't be the only metric you look at when researching a company. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Can we work out why the company is trading at a discount to intrinsic value? For B&M European Value Retail, there are three essential elements you should explore: Risks: Be aware that B&M European Value Retail is showing 2 warning signs in our investment analysis , you should know about... Future Earnings: How does BME's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart . Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. Simply Wall St updates its DCF calculation for every British stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 20.03.25 10:56:50 | B&M European Value Retail (LON:BME) shareholders have endured a 40% loss from investing in the stock three years ago | |
| In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But if you try your hand at stock picking, you risk returning less than the market. We regret to report that long term B&M European Value Retail S.A. (LON:BME) shareholders have had that experience, with the share price dropping 53% in three years, versus a market return of about 19%. And over the last year the share price fell 49%, so we doubt many shareholders are delighted. The falls have accelerated recently, with the share price down 24% in the last three months. So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress. View our latest analysis for B&M European Value Retail In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. B&M European Value Retail saw its EPS decline at a compound rate of 9.0% per year, over the last three years. The share price decline of 22% is actually steeper than the EPS slippage. So it seems the market was too confident about the business, in the past. The less favorable sentiment is reflected in its current P/E ratio of 8.30. The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).LSE:BME Earnings Per Share Growth March 20th 2025 It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Dive deeper into the earnings by checking this interactive graph of B&M European Value Retail's earnings, revenue and cash flow. What About Dividends? When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of B&M European Value Retail, it has a TSR of -40% for the last 3 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return. Story Continues A Different Perspective While the broader market gained around 14% in the last year, B&M European Value Retail shareholders lost 44% (even including dividends). Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 7% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand B&M European Value Retail better, we need to consider many other factors. For instance, we've identified 2 warning signs for B&M European Value Retail that you should be aware of. There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this freelist of undervalued small cap companies that insiders are buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 03.03.25 12:14:53 | Is B&M European Value Retail S.A.'s (LON:BME) 44% ROE Better Than Average? | |
| While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. By way of learning-by-doing, we'll look at ROE to gain a better understanding of B&M European Value Retail S.A. (LON:BME). ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Put another way, it reveals the company's success at turning shareholder investments into profits. See our latest analysis for B&M European Value Retail How Do You Calculate Return On Equity? The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for B&M European Value Retail is: 44% = UK£326m ÷ UK£742m (Based on the trailing twelve months to September 2024). The 'return' is the income the business earned over the last year. That means that for every £1 worth of shareholders' equity, the company generated £0.44 in profit. Does B&M European Value Retail Have A Good Return On Equity? One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As you can see in the graphic below, B&M European Value Retail has a higher ROE than the average (17%) in the Multiline Retail industry.LSE:BME Return on Equity March 3rd 2025 That's clearly a positive. However, bear in mind that a high ROE doesn’t necessarily indicate efficient profit generation. Aside from changes in net income, a high ROE can also be the outcome of high debt relative to equity, which indicates risk. To know the 2 risks we have identified for B&M European Value Retail visit our risks dashboard for free. How Does Debt Impact ROE? Companies usually need to invest money to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the use of debt will improve the returns, but will not change the equity. That will make the ROE look better than if no debt was used. Combining B&M European Value Retail's Debt And Its 44% Return On Equity It's worth noting the high use of debt by B&M European Value Retail, leading to its debt to equity ratio of 1.30. While no doubt that its ROE is impressive, we would have been even more impressed had the company achieved this with lower debt. Investors should think carefully about how a company might perform if it was unable to borrow so easily, because credit markets do change over time. Story Continues Conclusion Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So you might want to check this FREE visualization of analyst forecasts for the company. But note: B&M European Value Retail may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 07.02.25 10:29:16 | B&M European Value Retail (LON:BME) Could Become A Multi-Bagger | |
| If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. Speaking of which, we noticed some great changes in B&M European Value Retail's (LON:BME) returns on capital, so let's have a look. What Is Return On Capital Employed (ROCE)? For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. The formula for this calculation on B&M European Value Retail is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.21 = UK£568m ÷ (UK£3.9b - UK£1.2b) (Based on the trailing twelve months to September 2024). So, B&M European Value Retail has an ROCE of 21%. That's a fantastic return and not only that, it outpaces the average of 10% earned by companies in a similar industry. View our latest analysis for B&M European Value Retail LSE:BME Return on Capital Employed February 7th 2025 In the above chart we have measured B&M European Value Retail's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering B&M European Value Retail for free. What Does the ROCE Trend For B&M European Value Retail Tell Us? B&M European Value Retail's ROCE growth is quite impressive. The figures show that over the last five years, ROCE has grown 78% whilst employing roughly the same amount of capital. So it's likely that the business is now reaping the full benefits of its past investments, since the capital employed hasn't changed considerably. On that front, things are looking good so it's worth exploring what management has said about growth plans going forward. What We Can Learn From B&M European Value Retail's ROCE As discussed above, B&M European Value Retail appears to be getting more proficient at generating returns since capital employed has remained flat but earnings (before interest and tax) are up. Considering the stock has delivered 36% to its stockholders over the last five years, it may be fair to think that investors aren't fully aware of the promising trends yet. So with that in mind, we think the stock deserves further research. Story Continues If you'd like to know about the risks facing B&M European Value Retail, we've discovered 2 warning signs that you should be aware of. If you want to search for more stocks that have been earning high returns, check out this freelist of stocks with solid balance sheets that are also earning high returns on equity. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 09.01.25 10:58:43 | Trending tickers: Nvidia, Costco, eBay, M&S and Tesco | |
| Nvidia (NVDA) Quantum computing stocks plunged on Wednesday after Nvidia CEO Jensen Huang said that "useful quantum computers" were likely 20 years away. This prompted steep falls in sector leaders, with Rigetti Computing (RGTI), IonQ Inc (IONQ), and Quantum Computing (QUBT) tumbling more than 40% during the trading session. Huang's comments on Tuesday in a Q&A session with analysts at the Consumer Electronics Show (CES), came a day after the CEO unveiled Nvidia's new products during a keynote speech at the conference. This included the company's GB10 superchip, which it said would be available in a small desktop called Project DIGITS. Huang also debuted Nvidia's open model license Cosmos platform for developing physical AI systems. These physical AI systems include technologies such as humanoid robots and self-driving robots. While shares closed at a record high ahead of Huang's highly-anticipated speech, the stock then slumped more than 6% in Tuesday's session. Shares then closed Wednesday's session flat and were down nearly 1% in pre-market trading on Thursday. Read more: FTSE 100 LIVE: Stocks mixed as pound falls to 14-month low after bond sell-off Charu Chanana, chief investment strategist at Saxo, said: "While Nvidia showcased exciting innovations, much of the demand for its existing hardware — especially in AI — was already well-known," she said. "Without fresh revenue catalysts, the announcements may have lacked the punch needed to excite investors seeking upside in the near term." "Tuesday’s sell-off in Nvidia shares may have been a classic case of 'buy the rumor, sell the fact'. "While the lack of near-term catalysts weighed on sentiment, Nvidia’s long-term growth story remains compelling." Meanwhile, Bloomberg reported that US president Joe Biden's administration was planning to announce additional restrictions on exports of AI chips from the likes of Nvidia. The Commerce Department's Bureau of Industry and Security, which deals with chip export controls, had not responded to Yahoo Finance UK's request for comment at the time of writing. A spokesperson for Nvidia also did not immediately respond to request for comment. NasdaqGS - Delayed Quote•USD (NVDA) Follow View Quote Details 131.76 - (-1.10%) At close: January 14 at 4:00:00 PM EST Advanced Chart Costco (COST) Wholesale retailer Costco posted net sales of $27.52bn (£22.4bn) for December, in figures released on Wednesday, which represented 10% growth on the $25.03bn it reported for the same period last year. Sales were up 8% in the first 18 weeks of Costco's fiscal year, rising to $94.04bn, compared with $87.07bn last year. Story Continues Costco said growth in e-commerce sales was helped by Thanksgiving, Black Friday and Cyber Monday occurring a week later this year. Read more: Pound, gold and oil prices in focus: commodity and currency check, 9 January Shares in the retailer were little changed in Wednesday's session but were up nearly 2% in pre-market trading on Thursday. Despite an uncertain consumer environment, Costco managed to slightly beat estimates in its first quarter results, released in December, as inflation-weary shoppers turned to the retailer. Adjusted earnings per share came in at $4.04, compared to Bloomberg consensus estimates of $3.81. Meanwhile, revenue of $62.15bn also beat expectations of $61.98bn. "Our members are willing to spend as inflation comes down" as long as there's "newness of items, quality, and value," CFO Gary Millerchip said on its earnings call at the time. NasdaqGS - Delayed Quote•USD (COST) Follow View Quote Details 917.23 - (-0.81%) At close: January 14 at 4:00:01 PM EST Advanced Chart eBay (EBAY) Shares in eBay surged 10% in Wednesday's session after social media platform Meta (META) announced that it would test launch eBay listings on Facebook Marketplace. Meta said that the test would be launched in the US, France and Germany. Stocks: | ||
| 03.01.25 13:29:13 | Stocks to watch this week: Shell, Walgreens Boots Alliance, M&S and Greggs | |
| The first full trading week of the year is set to see trading updates from a number of companies, as investors gear up for another earnings season. Investors will be looking at Shell's latest trading update to get an idea how the company is performing as oil demand weakens. The latest earnings from Walgreens Boots Alliance will also be in focus, following recent reports of talks around a potential private equity buyout deal. Read more: What will happen to interest rates in 2025? In the UK, high street stalwart Marks & Spencer is one of a number of retailers due to release a Christmas trading update this week. Meanwhile, investors will be looking to see if bakery chain Greggs served up a stronger final quarter of sales. Here's more on what to look for: Shell (SHEL.L) — Releases fourth quarter trading update on Wednesday, 8 January Oil major Shell is set to give investors an update on how it has performed in the fourth quarter, with the full results due out at the end of January. In the third quarter, Shell reported a slight fall in profits to $6bn (£4.83bn) though this still came in ahead of expectations. Income attributable to shareholders came in at $4.3bn, which was up from $3.5bn in the second quarter, though much lower than the $7bn reported for the same period in the previous year. Shell said the third-quarter figure partly reflected weaker refining margins, lower realised oil prices and higher operating expenses. Read more: Stocks that are trending today Oil prices have been under pressure over the past year over concerns about reduced demand. Prices have also fluctuated because of the conflict in the Middle East and the economic slowdown in China, the world's largest importer of crude oil. The global oil market is set to be in surplus in 2025, according to a recent forecast from the International Energy Agency. That's despite OPEC+ – which controls about half of the world’s oil output – deciding to extend supply cuts. Warren Patterson, head of commodities strategy at ING, said that this surplus could see prices trending lower this year. He said that ING expected ICE Brent, a benchmark for crude oil, to average $71 per barrel over 2025. Shell's full results for the fourth quarter are due out on 30 January, with investors looking to see if the company launches another round of share buybacks, having announced a further $3.5bn repurchase programme in its third-quarter results. Walgreens Boots Alliance (WBA) — Reports first quarter earnings on Friday 10 January US pharmacy group Walgreens Boots Alliance finished 2024 as the worst performer in the S&P 500 (^GSPC), with shares diving 64% during the year. Story Continues The stock has fallen to its lowest point in nearly 30 years, with the company having faced challenges in the sector, such as pressure from the growth of online prescription delivery platforms. In its fourth-quarter results, Walgreens posted a loss of $3.48 per share, versus $0.21 for the same period in 2023. Read more: How major tech stocks could perform in 2025 For the year, Walgreens' loss per share widened 180% to $10.01. Sales for its 2024 fiscal year rose 6% to $147.7bn. The company also announced in the results that it planned to close approximately 1,200 stores over three years, 500 of which it would look to close in its 2025 fiscal year. Walgreens shares briefly surged in December on reports that the company was in talks to be bought out by a private equity firm, which would take the company off the public market. Other reports said that such a deal could trigger a fresh auction of UK chain Boots, which is part of the larger Walgreens Boots Alliance business. For the 2025 fiscal year, Walgreens said it expected to generate earnings per share of $1.40 to $1.80, with growth in its US healthcare and international segments offset by a decline in US retail pharmacy. NasdaqGS - Delayed Quote•USD (WBA) Follow View Quote Details 12.53 - +(2.37%) At close: 4:00:01 PM EST Advanced Chart Marks & Spencer (MKS.L) — Releases Christmas trading update on Thursday, 9 January Following its run of strong performance over the past year, investors will be looking closely at the Christmas trading update from M&S, as Christmas is a crucial period for the high street. Shares are currently at their highest point since 2016, with M&S having posted a 35% increase in profit after tax to £278.6m in its first-half results in November. The retailer reported nearly a 6% rise in sales to £6.5bn in the first half. AJ Bell's investment experts Russ Mould, Danni Hewson, and Dan Coatsworth, said: "This Christmas update will be the next test for M&S, which traditionally makes more money in the second half of its financial year to March than the first, thanks to the festive season. Stocks: Create your watchlist and portfolio "That said, the year to March 2024 was an exception, as M&S used the springboard of a much-better-than-expected first half to invest again in the second, while the clothing business also had to take on considerable input cost increases." They said that, while M&S CEO Stuart Machin may avoid any firm guidance on sales and profits for the full year, current market consensus is looking for a 5% increase in total group sales to £13.7bn and adjusted pre-tax income of £830m, versus £716m a year ago. Prior to the release of the M&S Christmas update, clothing retailer Next (NXT.L) is slated to release its Christmas and fourth-quarter trading update on Tuesday, 7 January. Meanwhile, supermarket Tesco (TSCO.L) is also due to release its Christmas and third-quarter trading statement on Thursday, 9 January, and Sainsbury's (SBRY.L) is set to publish its Q3 update on Friday. Data released Friday from the British Retail Consortium showed a 2.2% decline in footfall on UK high streets in December. While this is not a clear indicator of retail sales, given the rise of online shopping, it may add to concerns about retailers' performance in the festive period. Greggs (GRG.L) — Releases fourth-quarter trading update on Thursday, 9 January Shares in Greggs have been under pressure since the food-on-the-go retailer released its third-quarter trading update at the beginning of October. While Greggs said like-for-like sales in company-managed shops were up 5% in the third quarter, this was still slower than the 7.4% growth it recorded in the first half. The slump in Greggs shares on the back of this most recent update has left the stock with a gain of just 7% on a one-year basis. Read more: Funds for investors to watch in 2025 The company said that, while it acknowledged "ongoing economic uncertainty", it still expected the full-year outcome to be in line with previous expectations. Matt Britzman, senior equity analyst at Hargreaves Lansdown (HL.L), said: "Markets are expecting headline revenue growth of just over 12% for the year, pushing annual revenue past the £2bn ($2.48bn) mark. "Beyond the numbers, Greggs has made solid progress on key growth initiatives, including new delivery partnerships, menu upgrades, and extended evening hours. "While these strategies are expected to gain further traction next year, the UK budget poses a challenge, with new tax changes likely to add tens of millions in costs," he added. Other companies reporting this week include: Tuesday 7 January Sodexo (SW.PA) Volvo Car (VOLCAR-B.ST) Norwegian Air Shuttle (NAS.OL) Wednesday 8 January Jefferies Financial (JEF) Albertsons (ACI) Thursday 9 January Unite (UTG.L) B&M European Value Retail (BME.L) Hilton Food (HFG.L) Fast Retailing (9983.T) Seven & i Holdings (3382.T) Constellation Brands (STZ) Friday 10 January Delta Air Lines (DAL) Read more: Money resolutions and how to stick to them Will gold prices rise in 2025 and how can you invest? Five ways to be less stressed at work in 2025 Download the Yahoo Finance app, available for Apple and Android. View Comments |
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