XTRA:B4B

Stock Analysis Report

Executive Summary

Metro AG engages in the wholesale and food retail business.

Rewards

Trading at 74.2% below its fair value

Earnings are forecast to grow -0.045% per year

Earnings grew by 13.8% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -0.04% per year for the next 3 years

Has a high level of debt

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Good value with adequate balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Metro's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: B4B has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.0%

B4B

-1.6%

DE Consumer Retailing

0.5%

DE Market


1 Year Return

-16.0%

B4B

-1.2%

DE Consumer Retailing

15.5%

DE Market

Return vs Industry: B4B underperformed the German Consumer Retailing industry which returned 4.8% over the past year.

Return vs Market: B4B underperformed the German Market which returned 17.1% over the past year.


Shareholder returns

B4BIndustryMarket
7 Day-4.0%-1.6%0.5%
30 Day-12.2%-3.1%1.4%
90 Day-12.3%-1.7%5.3%
1 Year-11.9%-16.0%2.7%-1.2%19.2%15.5%
3 Yearn/a2.2%-8.0%15.7%5.5%
5 Yearn/a11.2%-5.9%27.3%10.1%

Price Volatility Vs. Market

How volatile is Metro's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Metro undervalued compared to its fair value and its price relative to the market?

44.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: B4B (€13.34) is trading below our estimate of fair value (€51.71)

Significantly Below Fair Value: B4B is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: B4B is good value based on its PE Ratio (12x) compared to the Consumer Retailing industry average (19.2x).

PE vs Market: B4B is good value based on its PE Ratio (12x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: B4B's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: B4B is overvalued based on its PB Ratio (1.8x) compared to the XE Consumer Retailing industry average (1.6x).


Next Steps

Future Growth

How is Metro forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

-0.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: B4B's forecast earnings growth (-0.04% per year) is above the savings rate (-0.4%).

Earnings vs Market: B4B's earnings are forecast to decline over the next 3 years (-0.04% per year).

High Growth Earnings: B4B's earnings are forecast to decline over the next 3 years.

Revenue vs Market: B4B's revenue (3.2% per year) is forecast to grow slower than the German market (4.8% per year).

High Growth Revenue: B4B's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: B4B's Return on Equity is forecast to be low in 3 years time (11.7%).


Next Steps

Past Performance

How has Metro performed over the past 5 years?

17.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: B4B has a large one-off gain of €322.0M impacting its September 30 2019 financial results.

Growing Profit Margin: B4B's current net profit margins (1.5%) are higher than last year (1.3%).


Past Earnings Growth Analysis

Earnings Trend: B4B's earnings have grown by 17.2% per year over the past 5 years.

Accelerating Growth: B4B's earnings growth over the past year (13.8%) is below its 5-year average (17.2% per year).

Earnings vs Industry: B4B earnings growth over the past year (13.8%) exceeded the Consumer Retailing industry 0.5%.


Return on Equity

High ROE: B4B's Return on Equity (15%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Metro's financial position?


Financial Position Analysis

Short Term Liabilities: B4B's short term assets (€7.8B) do not cover its short term liabilities (€8.3B).

Long Term Liabilities: B4B's short term assets (€7.8B) exceed its long term liabilities (€3.4B).


Debt to Equity History and Analysis

Debt Level: B4B's debt to equity ratio (99.3%) is considered high.

Reducing Debt: B4B's debt to equity ratio has reduced from 849.6% to 99.3% over the past 5 years.

Debt Coverage: B4B's debt is well covered by operating cash flow (35.1%).

Interest Coverage: B4B's interest payments on its debt are well covered by EBIT (4.3x coverage).


Balance Sheet

Inventory Level: B4B has a high level of physical assets or inventory.

Debt Coverage by Assets: B4B's debt is covered by short term assets (assets are 2.9x debt).


Next Steps

Dividend

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

5.50%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Metro before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company5.5%marketbottom25%1.4%markettop25%3.5%industryaverage3.6%forecastin3Years4.9%

Current dividend yield vs market & industry

Notable Dividend: B4B's dividend (5.25%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: B4B's dividend (5.25%) is in the top 25% of dividend payers in the German market (3.53%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, B4B has been paying a dividend for less than 10 years.

Growing Dividend: B4B has only been paying a dividend for 2 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (62.8%), B4B's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: B4B's dividends in 3 years are forecast to be covered by earnings (61.6% payout ratio).


Next Steps

Management

What is the CEO of Metro's salary, the management and board of directors tenure and is there insider trading?

1.7yrs

Average management tenure


CEO

Olaf Koch (49yo)

2.8yrs

Tenure

€4,114,000

Compensation

Mr. Olaf G. Koch serves as Member of the Management Board at Metro Cash & Carry International GmbH since January 1, 2012. Mr. Koch serves as Chairman of the Management Board and Chief Executive Officer at  ...


CEO Compensation Analysis

Compensation vs Market: Olaf's total compensation ($USD4.58M) is about average for companies of similar size in the German market ($USD3.59M).

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


Management Age and Tenure

1.7yrs

Average Tenure

47.5yo

Average Age

Experienced Management: B4B's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Age and Tenure

2.9yrs

Average Tenure

58yo

Average Age

Experienced Board: B4B's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Insider Trading

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 not been meaningfully diluted in the past year.


Management Team

  • Olaf Koch (49yo)

    Chairman of the Management Board & CEO

    • Tenure: 2.8yrs
    • Compensation: €4.11m
  • Philippe Palazzi (48yo)

    COO & Member of the Management Board

    • Tenure: 1.7yrs
    • Compensation: €2.21m
  • Christian Baier (43yo)

    CFO & Member of the Management Board

    • Compensation: €2.13m
  • Sabrina Ley

    Director of IR

    • Andrea Euenheim (47yo)

      Chief HR Officer

      • Tenure: 1yrs

    Board Members

    • Peter Küpfer (75yo)

      Member of Supervisory Board

      • Tenure: 2.9yrs
      • Compensation: €80.00k
    • Edgar Ernst (67yo)

      Member of Supervisory Board

      • Tenure: 2.9yrs
      • Compensation: €160.00k
    • Werner Klockhaus (59yo)

      Vice Chairman of the Supervisory Board

      • Compensation: €160.00k
    • Gwyn Burr (56yo)

      Member of Supervisory Board

      • Tenure: 2.9yrs
      • Compensation: €120.00k
    • Herbert Bolliger (66yo)

      Member of Supervisory Board

      • Tenure: 1.9yrs
      • Compensation: €80.00k
    • Susanne Meister (57yo)

      Member of Supervisory Board

      • Tenure: 2.9yrs
      • Compensation: €80.00k
    • Jürgen Steinemann (61yo)

      Chairman of the Supervisory Board

      • Compensation: €240.00k
    • Thomas Dommel (56yo)

      Member of Supervisory Board

      • Tenure: 2.9yrs
      • Compensation: €120.00k
    • Stefanie Blaser (53yo)

      Member of Supervisory Board

      • Tenure: 1.9yrs
      • Compensation: €80.00k
    • Michael Heider (56yo)

      Member of Supervisory Board

      • Tenure: 2.9yrs
      • Compensation: €80.00k

    Company Information

    Metro AG's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Metro AG
    • Ticker: B4B
    • Exchange: XTRA
    • Founded:
    • Industry: Hypermarkets and Super Centers
    • Sector: Consumer Retailing
    • Market Cap: €4.623b
    • Shares outstanding: 363.10m
    • Website: https://www.metroag.de

    Number of Employees


    Location

    • Metro AG
    • Metro-Strasse 1
    • Düsseldorf
    • North Rhine-Westphalia
    • 40235
    • Germany

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    METORBDL (Bourse de Luxembourg)YesCommon SharesLUEURJul 2017
    METPRBDL (Bourse de Luxembourg)Preference SharesLUEURJul 2017
    0RTFLSE (London Stock Exchange)Preference SharesGBEURJul 2017
    0RTELSE (London Stock Exchange)YesCommon SharesGBEURJul 2017
    B4BDB (Deutsche Boerse AG)YesCommon SharesDEEURJul 2017
    B4BXTRA (XETRA Trading Platform)YesCommon SharesDEEURJul 2017
    B4B3XTRA (XETRA Trading Platform)Preference SharesDEEURJul 2017
    B4B3DB (Deutsche Boerse AG)Preference SharesDEEURJul 2017
    B4BSWX (SIX Swiss Exchange)YesCommon SharesCHCHFJul 2017
    MTTW.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJul 2017
    MEOWBAG (Wiener Boerse AG)YesCommon SharesATEURJul 2017
    B4B3DBATS-CHIXE (BATS 'Chi-X Europe')Preference SharesGBEURJul 2017
    B4BVXTRA (XETRA Trading Platform)PRF (ASD 26/08/2019 EP GLOBAL COM CASH)DEEURJul 2019
    B4BSXTRA (XETRA Trading Platform)NPV (ASD 26/08/2019 EP GLOBAL COM CASH)DEEURJul 2019

    Biography

    Metro AG engages in the wholesale and food retail business. It operates 771 wholesale stores under the METRO and MAKRO brands primarily serving the needs of hotels, restaurants, catering companies, and independent retailers, as well as service providers and authorities. The company also develops digital solutions. In addition, it provides services in the areas of real estate, logistics, information technology, and advertising. The company was formerly known as METRO Wholesale & Food Specialist AG and changed its name to METRO AG in August 2017. Metro AG is based in Düsseldorf, Germany. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/22 22:33
    End of Day Share Price2020/01/22 00:00
    Earnings2019/09/30
    Annual Earnings2019/09/30


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.