Retail Estates (ENXTBR:RET) - Share price, News & Analysis

Q: What is the Fair Price of RET when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

RET (€63.6) is trading below our estimate of [[fair value]] (€142.1)

RET fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	1/6
Past Performance	3/6
Financial Health	2/6
Dividends	6/6

RET Stock Overview

Rewards

Trading at 55.2% below our estimate of its fair value

Revenue is forecast to grow 4.76% per year

Earnings have grown 15.4% per year over the past 5 years

Pays a high and reliable dividend of 7.23%

Risk Analysis

Debt is not well covered by operating cash flow

Large one-off items impacting financial results

Shareholders have been diluted in the past year

Retail Estates Competitors

Wereldhave Belgium

ENXTBR:WEHB

€418.5m

Ascencio

ENXTBR:ASC

€343.7m

Vastned Belgium

ENXTBR:VASTB

€153.9m

Intervest Offices & Warehouses

ENXTBR:INTO

€656.2m

Price History & Performance

Summary of all time highs, changes and price drops for Retail Estates
Historical stock prices
Current Share Price	€63.60
52 Week High	€75.90
52 Week Low	€61.00
Beta	1.08
1 Month Change	-13.70%
3 Month Change	-14.97%
1 Year Change	-7.02%
3 Year Change	-23.19%
5 Year Change	-19.04%
Change since IPO	85.42%

Shareholder Returns

	RET	BE REITs	BE Market
7D	-4.4%	-2.3%	-0.3%
1Y	-7.0%	-11.0%	-10.5%

Return vs Industry: RET exceeded the Belgian REITs industry which returned -11% over the past year.

Return vs Market: RET exceeded the Belgian Market which returned -10.5% over the past year.

Price Volatility

Is RET's price volatile compared to industry and market?
RET volatility
RET Average Weekly Movement	4.8%
REITs Industry Average Movement	3.8%
Market Average Movement	4.6%
10% most volatile stocks in BE Market	7.9%
10% least volatile stocks in BE Market	2.6%

Stable Share Price: RET is not significantly more volatile than the rest of Belgian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: RET's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1988	36	Jan De Nys	https://www.retailestates.com

The Belgian public real estate investment trust Retail Estates nv is a niche player specialised in making in out-of-town retail properties located on the periphery of residential areas or along main access roads to urban centres available to users. Real Estates NV acquires these real properties from third parties or builds and commercialises retail buildings for its own account. The buildings have useful areas ranging between 500m² and 3,000m².

Retail Estates Fundamentals Summary

How do Retail Estates's earnings and revenue compare to its market cap?
RET fundamental statistics
Market Cap	€841.20m
Earnings (TTM)	€131.84m
Revenue (TTM)	€113.69m

6.4x

P/E Ratio

7.4x

P/S Ratio

Is RET overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RET income statement (TTM)
Revenue	€113.69m
Cost of Revenue	€9.68m
Gross Profit	€104.01m
Other Expenses	-€27.83m
Earnings	€131.84m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	9.97
Gross Margin	91.48%
Net Profit Margin	115.96%
Debt/Equity Ratio	93.5%

How did RET perform over the long term?

See historical performance and comparison

Dividends

7.2%

Current Dividend Yield

70%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is RET undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RET?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RET. This is calculated by dividing RET's market cap by their current preferred multiple.
What is RET's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	€841.20m

RET key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	15x
Enterprise Value/EBITDA	17.5x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does RET's PE Ratio compare to its peers?

RET PE Ratio vs Peers

The above table shows the PE ratio for RET vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	9.4x
WEHB Wereldhave Belgium	11x	n/a	€418.5m
ASC Ascencio	4.9x	n/a	€343.7m
VASTB Vastned Belgium	15.4x	n/a	€153.9m
INTO Intervest Offices & Warehouses	6.5x	n/a	€656.2m
RET Retail Estates	6.4x	n/a	€841.2m

Forward PE

Price-To-Earnings vs Peers: RET is good value based on its Price-To-Earnings Ratio (6.4x) compared to the peer average (9.4x).

Price to Earnings Ratio vs Industry

How does RET's PE Ratio compare vs other companies in the European REITs Industry?

Price-To-Earnings vs Industry: RET is good value based on its Price-To-Earnings Ratio (6.4x) compared to the Belgian REITs industry average (8.7x)

Price to Earnings Ratio vs Fair Ratio

What is RET's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RET PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	6.4x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate RET's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of RET when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RET (€63.6) is trading below our estimate of fair value (€142.1)

Significantly Below Fair Value: RET is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RET's PEG Ratio to determine if it is good value.

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Future Growth

How is Retail Estates forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

4.8%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if RET's forecast earnings growth is above the savings rate (1.1%).

Earnings vs Market: Insufficient data to determine if RET's earnings are forecast to grow faster than the Belgian market

High Growth Earnings: Insufficient data to determine if RET's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: RET's revenue (4.8% per year) is forecast to grow faster than the Belgian market (1.9% per year).

High Growth Revenue: RET's revenue (4.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: RET's Return on Equity is forecast to be low in 3 years time (9%).

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Past Performance

How has Retail Estates performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

15.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RET has a large one-off gain of €56.8M impacting its March 31 2022 financial results.

Growing Profit Margin: RET's current net profit margins are higher than last year (60.9%).

Past Earnings Growth Analysis

Earnings Trend: RET's earnings have grown by 15.4% per year over the past 5 years.

Accelerating Growth: RET's earnings growth over the past year (114.6%) exceeds its 5-year average (15.4% per year).

Earnings vs Industry: RET earnings growth over the past year (114.6%) underperformed the REITs industry 134.8%.

Return on Equity

High ROE: RET's Return on Equity (14.3%) is considered low.

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Financial Health

How is Retail Estates's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: RET's short term assets (€20.2M) do not cover its short term liabilities (€126.5M).

Long Term Liabilities: RET's short term assets (€20.2M) do not cover its long term liabilities (€764.8M).

Debt to Equity History and Analysis

Debt Level: RET's net debt to equity ratio (93.4%) is considered high.

Reducing Debt: RET's debt to equity ratio has reduced from 104% to 93.5% over the past 5 years.

Debt Coverage: RET's debt is not well covered by operating cash flow (9.4%).

Interest Coverage: RET's interest payments on its debt are well covered by EBIT (5.2x coverage).

Balance Sheet

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Dividend

What is Retail Estates's current dividend yield, its reliability and sustainability?

Dividend Score

6/6

Dividend Score 6/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

7.23%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: RET's dividend (7.23%) is higher than the bottom 25% of dividend payers in the Belgian market (2.02%).

High Dividend: RET's dividend (7.23%) is in the top 25% of dividend payers in the Belgian market (6.08%)

Stability and Growth of Payments

Stable Dividend: RET's dividends per share have been stable in the past 10 years.

Growing Dividend: RET's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (70.2%), RET's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (78.1%), RET's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

11.4yrs

Average management tenure

CEO

Jan De Nys (63 yo)

24.5yrs

Tenure

€501,000

Compensation

Mr. Jan De Nys is Managing Director and Chief Executive Officer of Retail Estates N.V. since 1998 and serves as its Director. Mr. De Nys started his career with De Bandt, Van Hecke in 1982. From 1999 to 20...

CEO Compensation Analysis

Compensation vs Market: Jan's total compensation ($USD521.12K) is below average for companies of similar size in the Belgian market ($USD794.93K).

Compensation vs Earnings: Jan's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: RET's management team is seasoned and experienced (11.4 years average tenure).

Board Members

Experienced Board: RET's board of directors are considered experienced (6.5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.4%.

Data	Last Updated (UTC time)
Company Analysis	2022/07/03 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31