Bloomberg News

Eurocash Jumps as UBS Upgrades Stock on Earnings: Warsaw Mover

November 12, 2012

Eurocash SA (EUR), Poland’s biggest distributor of non-durable consumer goods, rose to a two-month high as UBS AG recommended buying its shares, citing “strong” third-quarter earnings.

The stock gained 1.8 percent to 41.5 zloty by the close in Warsaw, the highest since Sept. 11. Turnover amounted to 96 percent of the daily average in the last three months. Eurocash has surged 45 percent this year, while the benchmark WIG20 Index advanced 8.9 percent.

UBS raised its recommendation on Eurocash to buy from neutral and increased its share-price estimate to 48 zloty from 41 zloty. Net income almost doubled to 66.7 million zloty ($20 million) in the third-quarter from 36.5 million zloty a year earlier, Eurocash said in a regulatory filing on Nov. 9.

“We expect Eurocash to continue to take share from its competitors, and see the difficult environment as likely to create opportunities and accelerate market consolidation.” Michal Potyra, a Warsaw-based analyst at UBS, said in a note today.

Eurocash will probably be “one of the consolidators” next year as Poland’s “fast-moving” consumer goods retail and distribution markets are “still very fragmented,” Potyra said.

The Komorniki, Poland-based company plans to continue paying dividend from this year’s profit, Parkiet reported today, citing Chief Executive Officer Luis Amaral.

To contact the reporter on this story: Piotr Bujnicki in Warsaw at pbujnicki@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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