DB:B4B3

Stock Analysis Report

Executive Summary

Metro AG engages in the wholesale and food retail business.

Rewards

Trading at 68.3% below its fair value

Earnings are forecast to grow 6.54% per year

Earnings have grown 3.4% per year over the past 5 years

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Highly volatile share price over past 3 months

Large one-off items impacting financial results



Snowflake Analysis

Undervalued average dividend payer.


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: B4B3's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0.2%

B4B3

3.4%

DE Consumer Retailing

-0.6%

DE Market


1 Year Return

-38.5%

B4B3

-6.6%

DE Consumer Retailing

-20.9%

DE Market

Return vs Industry: B4B3 underperformed the German Consumer Retailing industry which returned -9.2% over the past year.

Return vs Market: B4B3 underperformed the German Market which returned -20.6% over the past year.


Shareholder returns

B4B3IndustryMarket
7 Day0.2%3.4%-0.6%
30 Day-27.6%-4.7%-20.0%
90 Day-36.9%-7.3%-26.3%
1 Year-34.9%-38.5%-2.9%-6.6%-18.6%-20.9%
3 Yearn/a0.6%-9.2%-19.0%-25.8%
5 Yearn/a-5.3%-19.8%-21.1%-31.8%

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

No news available

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: B4B3 (€8.36) is trading below our estimate of fair value (€26.4)

Significantly Below Fair Value: B4B3 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: B4B3 is good value based on its PE Ratio (8x) compared to the Consumer Retailing industry average (18.1x).

PE vs Market: B4B3 is good value based on its PE Ratio (8x) compared to the German market (16.6x).


Price to Earnings Growth Ratio

PEG Ratio: B4B3 is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: B4B3 is good value based on its PB Ratio (1.3x) compared to the XE Consumer Retailing industry average (1.3x).


Next Steps

Future Growth

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

6.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: B4B3's forecast earnings growth (6.5% per year) is above the savings rate (-0.4%).

Earnings vs Market: B4B3's earnings (6.5% per year) are forecast to grow slower than the German market (14.2% per year).

High Growth Earnings: B4B3's earnings are forecast to grow, but not significantly.

Revenue vs Market: B4B3's revenue (2.6% per year) is forecast to grow slower than the German market (4% per year).

High Growth Revenue: B4B3's revenue (2.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: B4B3's Return on Equity is forecast to be low in 3 years time (11%).


Next Steps

Past Performance

How has Metro performed over the past 5 years?

3.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: B4B3 has a large one-off gain of €324.0M impacting its December 31 2019 financial results.

Growing Profit Margin: B4B3's current net profit margins (1.3%) are lower than last year (1.3%).


Past Earnings Growth Analysis

Earnings Trend: B4B3's earnings have grown by 3.4% per year over the past 5 years.

Accelerating Growth: B4B3's earnings growth over the past year (2%) is below its 5-year average (3.4% per year).

Earnings vs Industry: B4B3 earnings growth over the past year (2%) underperformed the Consumer Retailing industry 2.2%.


Return on Equity

High ROE: B4B3's Return on Equity (15.6%) is considered low.


Next Steps

Financial Health

How is Metro's financial position?


Financial Position Analysis

Short Term Liabilities: B4B3's short term assets (€9.4B) do not cover its short term liabilities (€10.3B).

Long Term Liabilities: B4B3's short term assets (€9.4B) exceed its long term liabilities (€5.6B).


Debt to Equity History and Analysis

Debt Level: B4B3's debt to equity ratio (219%) is considered high.

Reducing Debt: B4B3's debt to equity ratio has reduced from 548.6% to 219% over the past 5 years.

Debt Coverage: B4B3's debt is not well covered by operating cash flow (17.7%).

Interest Coverage: B4B3's interest payments on its debt are well covered by EBIT (4.4x coverage).


Balance Sheet

Inventory Level: B4B3 has a high level of physical assets or inventory.

Debt Coverage by Assets: B4B3's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

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

9.00%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: B4B3's dividend (9%) is higher than the bottom 25% of dividend payers in the German market (1.69%).

High Dividend: B4B3's dividend (9%) is in the top 25% of dividend payers in the German market (4.85%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, B4B3 has been paying a dividend for less than 10 years.

Growing Dividend: B4B3 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 (72.4%), B4B3's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: B4B3's dividends in 3 years are forecast to be covered by earnings (69.5% payout ratio).


Next Steps

Management

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

1.9yrs

Average management tenure


CEO

Olaf Koch (49yo)

3.08s

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 ($USD4.44M) is about average for companies of similar size in the German market ($USD3.59M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Olaf Koch
Chairman of the Management Board & CEO3.08yrs€4.11mno data
Christian Baier
CFO & Member of the Management Boardno data€2.13mno data
Philippe Palazzi
COO & Member of the Management Board1.92yrs€2.21mno data
Andrea Euenheim
Chief HR Officer1.25yrsno datano data
Sabrina Ley
Director of IRno datano datano data

1.9yrs

Average Tenure

47.5yo

Average Age

Experienced Management: B4B3's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Peter Küpfer
Member of Supervisory Board3.17yrs€80.00kno data
Edgar Ernst
Member of Supervisory Board3.17yrs€160.00kno data
Werner Klockhaus
Vice Chairman of the Supervisory Boardno data€160.00kno data
Gwyneth Burr
Member of Supervisory Board3.17yrs€120.00kno data
Herbert Bolliger
Member of Supervisory Board2.17yrs€80.00kno data
Susanne Meister
Member of Supervisory Board3.17yrs€80.00kno data
Jürgen Steinemann
Chairman of the Supervisory Boardno data€240.00kno data
Thomas Dommel
Member of Supervisory Board3.17yrs€120.00kno data
Stefanie Blaser
Member of Supervisory Board2.17yrs€80.00kno data
Michael Heider
Member of Supervisory Board3.17yrs€80.00kno data

3.2yrs

Average Tenure

58yo

Average Age

Experienced Board: B4B3's board of directors are considered experienced (3.2 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 not been meaningfully diluted in the past year.


Top Shareholders

Company Information

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


Key Information

  • Name: Metro AG
  • Ticker: B4B3
  • Exchange: DB
  • Founded:
  • Industry: Hypermarkets and Super Centers
  • Sector: Consumer Retailing
  • Market Cap: €2.830b
  • 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
METPRBDL (Bourse de Luxembourg)Preference SharesLUEURJul 2017
B4B3DB (Deutsche Boerse AG)Preference SharesDEEURJul 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
METORBDL (Bourse de Luxembourg)YesCommon SharesLUEURJul 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 678 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 in Europe and Asia. The company also develops digital solutions. The company also offers food delivery services for 5-star hotels, upmarket restaurants, and commercial and other customers. In addition, it provides services in the areas of real estate, logistics, information technology, procurement, 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 headquartered in Düsseldorf, Germany. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/03 23:18
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
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.