Last Update 26 Jun 26
Fair value Decreased 23%MATAS: Share Capital Reduction Will Support Leaner Earnings Profile
Analysts have revised their price target for Matas to DKK 140.0 from DKK 182.5. The change reflects updated assumptions on discount rate, revenue growth, profit margin and future P/E expectations.
What’s in the News for Matas
- Matas A/S plans to propose a reduction of the company’s share capital by DKK 2,017,592.50 at the Annual General Meeting scheduled for June 16, 2026. The reduction would take place through the cancellation of 807,037 treasury shares of DKK 2.50 each, equal to 2.1% of the current share capital. Source: Key Developments
- Following the proposed cancellation of treasury shares, Matas projects that the company’s nominal share capital would be DKK 93,711,137.50. This would be divided into shares of DKK 2.50 each or multiples of that amount. Source: Key Developments
- In connection with the share capital reduction, Matas intends to amend Article 2.1 of its Articles of Association to reflect the new nominal share capital. Final registration is expected after the creditor notification process via the Danish Business Authority’s IT system. Source: Key Developments
Valuation Changes for Matas
- Fair Value: DKK 182.50 to DKK 140.00, indicating a material downward revision to the estimated value per share.
- Discount Rate: 8.51% to 9.07%, implying a slightly higher required return in the updated assessment.
- Revenue Growth: 5.93% to 4.79%, reflecting a more cautious outlook on future DKK revenue expansion.
- Net Profit Margin: 6.99% to 5.37%, pointing to a leaner projected earnings profile on DKK sales.
- Future P/E: 12.16x to 11.40x, suggesting a modestly lower valuation multiple applied to Matas in the new model.
Catalysts
About Matas
Matas Group operates a leading Nordic beauty and well-being retail platform across physical stores and e-commerce.
What are the underlying business or industry changes driving this perspective?
- Scaling the unified digital platform across four Nordic markets is expected to lift conversion, upselling and app driven engagement, supporting continued revenue growth and operating leverage in e-commerce earnings.
- Leveraging a combined Nordic footprint to win exclusive international brands and roll out owned labels such as Nilens Jord beyond Denmark increases bargaining power and mix towards higher margin products, supporting gross margin expansion and EBITDA growth.
- Two modern, automated logistics centers that are now fully operational create room for tighter workforce planning, faster delivery and lower fulfillment costs, which could start to visibly affect net margins and cash conversion as inventories normalize after peak season.
- Effective capture of younger and social media driven customers via trend led assortments and retail media initiatives positions Matas to address structurally rising beauty and wellness demand, supporting steady like for like growth and resilient earnings through cycles.
- Disciplined cost control, additional KICKS synergies and pricing capabilities built in recent years may help offset FX and competitive pressures over time, with the group aiming to sustain an EBITDA margin around 15 percent and to grow earnings faster than sales.
Assumptions
How have these above catalysts been quantified?
- Analysts are assuming Matas's revenue will grow by 4.8% annually over the next 3 years.
- Analysts assume that profit margins will increase from 2.8% today to 5.4% in 3 years time.
- Analysts expect earnings to reach DKK 541.7 million (and earnings per share of DKK 15.5) by about June 2029, up from DKK 243.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting DKK642.9 million in earnings, and the most bearish expecting DKK474.1 million.
- In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 11.4x on those 2029 earnings, down from 13.6x today. This future PE is lower than the current PE for the GB Specialty Retail industry at 13.6x.
- Analysts expect the number of shares outstanding to decline by 2.77% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 9.07%, as per the Simply Wall St company report.
Risks
What could happen that would invalidate this narrative?
- The high end positioning of the KICKS chain makes it structurally more exposed to cyclical swings in Nordic consumer confidence. As a result, a prolonged period of cautious spending in Sweden and Norway could structurally cap like for like growth and slow group revenue and earnings momentum.
- Persistent FX headwinds between the Swedish krona and other Nordic currencies, combined with continued investment in pricing to stay competitive, may keep KICKS gross margins below management’s ambitions and limit net margin expansion even as sales grow.
- The aggressive rollout of physical stores by competitors in Sweden and broader category overlap online could dilute Matas Group’s market share gains and erode the sales uplift expected from new store openings and the unified digital platform, weighing on revenue growth and operating leverage.
- Structural increases in inventory levels tied to wider assortments and caution around new automated logistics centers could become permanent rather than temporary, depressing cash conversion, elevating gearing and constraining the company’s capacity to sustain buybacks and growth investments.
Valuation
How have all the factors above been brought together to estimate a fair value?
- The analysts have a consensus price target of DKK140.0 for Matas based on their expectations of its future earnings growth, profit margins and other risk factors.
- However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of DKK160.0, and the most bearish reporting a price target of just DKK120.0.
- In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be DKK10.1 billion, earnings will come to DKK541.7 million, and it would be trading on a PE ratio of 11.4x, assuming you use a discount rate of 9.1%.
- Given the current share price of DKK89.2, the analyst price target of DKK140.0 is 36.3% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
