Jeronimo Martins: 2Q26: EBITDA 3% ahead as margins expand despite deflationary pressures

Research evidence excerpt

Jeronimo Martins: 2Q26: EBITDA 3% ahead as margins expand despite deflationary pressures

Forecast returns

Forecast price appreciation 54.4%

Forecast dividend yield 3.9%

Forecast stock return 58.3%

Market return assumption 7.7%

Forecast excess return 50.6%

Company Description

Jerónimo Martins is a Portuguese food household products retailer operating in the discount

format, with significant exposure to Poland (72% of sales). The company mainly develops its

activities through its main supermarket (Pingo Doce) and cash and carry (Recheio) chains in

Portugal and discount food stores in Poland (Biedronka). Additionally, the company operates

in Colombia through its Ara discount chain (8% of sales).

Valuation Method and Risk Statement

We value Jeronimo Martins using a DCF model with 9.3% WACC and 2.5% terminal growth

rate. The main risk facing the European grocers is price war, we believe. The probability of

price war rises when major imbalances between supply and demand exist. Consumers' tastes

and preferences can also shift. For instance, they may become more accepting of

pricefocused operators carrying only limited ranges. Other risks include exposure to currency

fluctuations (mainly relating to translation), changes in industry consumption growth (for

instance driven by real wage growth) as well as agricultural cost inflation which the grocers

are unable to pass through to consumers. Regulatory risks are normally low but there have

been instances where regulators act to protect small suppliers, for instance, by reducing

payment terms. Organic expansion in Colombia (a new market for Jerónimo Martins) could

be risky and may lead to long-term margin dilution and/or write-downs.

First Read: Jeronimo Martins 29 July 2026 ab 2