3i Lowering Action estimates, but 3i estimates modestly increase due to buyback; remain Overweight at 29% headline discount and implied LTM RR EBITDA multiple for Action of 13x

Research evidence excerpt

3i Lowering Action estimates, but 3i estimates modestly increase due to buyback; remain Overweight at 29% headline discount and implied LTM RR EBITDA multiple for Action of 13x

C A Z E N O V E Europe Equity Research

15 May 2026

3i

Lowering Action estimates, but 3i estimates modestly Overweight

increase due to buyback; remain Overweight at 29% III.L, III LN

headline discount and implied LTM RR EBITDA multiple Price (14 May 26):2,112p

for Action of 13x

European Investment Companies

3i’s 31/3/26 NAV yesterday was 2% below our estimate, but what spooked the Christopher Brown AC

market was the slowdown in Action’s LFLs in France and now Germany, together (44-20) 7134-4722

around 50% of sales, over a relatively short seven-week period to 10 May. The christopher.brown@jpmorgan.com

shares touched 1825p at one stage, down 25%, before recovering to close at Investment Companies

2112pps, down 12.8% and 53% below their October 2025 peak. We provisionally Adam Kelly, CFA

took 56pps off our live NAVe yesterday and, having now updated our model in full, (44-20) 7742-9526

add back 11pps, arriving at a live 3089pps, up 0.4%. We introduce a new 30/9/26 adam.kelly@jpmorgan.com

half year estimate of 3291pps, which includes a ~1% impact from our assumption J.P. Morgan Securities plc

that the £750m buyback is completed at the current share price by then. We

modestly increase our 31/3/27 and 31/3/28 estimates by 0.4% and 0.8%

respectively to 3612pps and 4148pps, both of which include the impact of the

buyback as well as forex movements since we last published estimates on 11/5/26.

The buyback not only increases the NAV per share in the short term, but increases

net gearing from around 2% currently to around 5% on a proforma basis (including

the Action and 3i dividend payments).