RBC Capital ups B&M European Value Retail to 'sector perform'

RBC Capital Markets upgraded B&M European Value Retail from ‘underperform’ on Thursday, citing a "moderate" valuation.

"We have raised our FY22-23 profit before tax forecasts by 1-2%, due to slightly higher UK like-for-like and France margin assumptions, and are circa 5% above the company compiled-consensus for FY23," RBC.

It noted that B&M now trades at around 13x CY22E price-to-earnings, towards the bottom end of its recent range, and should show moderate growth post a very strong pandemic period.

"We upgrade to sector perform, but have more valuation upside for some other UK general retailers, for whom we expect more imminent extra cash returns," it said.

RBC kept the price target at 600p.