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1、Deutsche BankDeutsche Bank Research: The Equity View: FRESH MONEY IDEAS #3 January 7th, 2018Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of t
2、his report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI(P) 083/04/2017Distributed on: 07/01/2018 21:00:00 GMT7T2se3r0Ot6kwoPa2Deutsche Bank Research: European Equity Focus Jan
3、uary 2018Table of ContentsThe Equity View OverviewConsumerPage 5 B This data does not include transaction costs; more information is available upon request)The Equity View Fresh Money Ideas OverviewDeutsche Bank Research: European Equity Focus January 20184Deutsche Bank Research: European Equity Foc
4、us January 2018ConsumerDeutsche Bank Research: European Equity Focus January 20185Deutsche Bank Research: European Equity Focus January 2018B FY17 results end Feb; FDA comments through 20180%5%10%15%20%25%30%35%40%0246810121416FY17FY18FY19FY20EBITDA (GBPbn) (LHS)Growth (RHS)Operational drivers are k
5、ey we see substantial EBITDA growth to comeSource: Deutsche Bank estimates; assumes 10% EPS growth21.5%5.0%1.3%12.0%2.9%7.4%0%10%20%30%40%50%EBITDA (operational) growthDebt paydown Assoc. and mins.P/E expansion ex operational drivers Incremental EPS at higher P/E multipleDPSRe-rating: 14.8%Operation
6、al drivers: 27.8% EV/EBITDA remains at 12.3xSource: Deutsche Bank estimates; assumes 10% EPS growthWe see potential for 50% TSR over the next two years Consumer2Related DB Research: Whats going on (Gallagher) You cant have your cake and eat it (Gallagher)7Deutsche Bank Research: European Equity Focu
7、s January 2018Bovis Homes Glynis Johnson, BUY, close 1185p, 1368p tgt, 15% upsideManagements targets for 2020 are credible (EBIT margins 18% and ROCE 25%) and provide scope for upside. We see scope for expansion from the following sources:Land bank intake margin is 26.4%, above the gross margin targ
8、et of 23.5%Contingency costs assumed in the current land bank and all new land intake should edge lower. These have increased from 2.5% to 4% of build cost, but the CEO has guided that these should fall.We have not included any benefits from new housetypes from 2018. This could help bring cost savin
9、gs and economies of scale.Admin costs are targeted to be below 5% of sales. They are at the top of the peer group at present and so this target implies substantial cost savings, but we believe volume improvements could help too.9% dividend yield from special cash return of 180m over three years. Pot
10、ential for higher dividends if Bovis constrains its land buying plans. Reducing land buying by half would increase cash available by 75m. The CEO is incentivised to pay out more than 180m in his LTIP.Organic cash flow can support the dividend post 2020. The cash generation potential is impressive, w
11、ith a 2018E FCF yield of 18.0%.Stock is still cheap at 1.2x 2018E P/TNAV, despite 30% rise in last six months.Catalysts: FY trading update on 12thJanuary, FY results on 1stMarch. Consumer3Deutsche Bank Research: European Equity Focus January 2018BarrattBerkeleyBellwayBovisCrest McCarthy Persimmon Re
12、drowTaylor 0.00.51.01.52.02.53%4%5%6%7%8%9%10%Dividend cover by FCF (x)Dividend yieldBovis has the best yield in the sector, and one of the best in the marketSource: Deutsche Bank2030405060708090100110120Mar-97 Nov-97 Jul-98 Mar-99 Nov-99 Jul-00 Mar-01 Nov-01 Jul-02 Mar-03 Nov-03 Jul-04 Mar-05 Nov-0
13、5 Jul-06 Mar-07 Nov-07 Jul-08 Mar-09 Nov-09 Jul-10 Mar-11 Nov-11 Jul-12 Mar-13 Nov-13 Jul-14 Mar-15 Nov-15 Jul-16 Mar-17Halifax HPIGreenfield landWe see margin upside from the land bank, with land trailing house pricesSource: Deutsche Bank, Halifax. Land: Savills UK resi land dev index. Rebased: Dec
14、 2007 = 100Related DB Research: Bovis: Benefits of strategy becoming evident (Johnson) UK Housebuilders: 2018 Outlook Better for longer (Johnson)8Deutsche Bank Research: European Equity Focus January 2018Carrefour Maxime Mallet, SELL, close 18.3, 15 tgt, 18% downsideWe believe 2018 consensus is at r
15、isk. We are 13% below consensus 18E EPS (and 15% below 19E consensus). Carrefour needs to invest given competitive pressures in France. Hypers (52% of French sales) suffers from a 5% price gap vs. Leclerc and underexposure to online grocery (with only 8% market share).Novembers Kantar data showed a
16、market share loss of 60bps to 20.5%.This is not confined to Hypers (40bps share loss); Supers also lost 30bps of market share.Recent price and promotional investments have not delivered better customer perceptions. Price perceptions are broadly flat YoY for both Supers and Hypers. Therefore, more will be needed.Carrefours market position is already weak. French EBIT margin is at a historical low of 2.0% in 2017E
