Time to take Action: Reiterate Buy, valuation remains highly compelling

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Time to take Action: Reiterate Buy, valuation remains highly compelling

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3i

Time to take Action

Reiterate Rating: BUY | PO: 3,530 GBp | Price: 2,624 GBp

Reiterate Buy, valuation remains highly compelling 08 July 2026

We reiterate our Buy rating and PO of 3530p on 3i, and remain highly positive into the Equity

Q126 update on 23rd July. We raise our NAV ~1% over FY27-29E, reflecting improving

LFL growth at Action and favourable FX with strengthening GBP. We see early signs of

Key ChangesLFL recovery as highly positive, with recent weakness having seen significant valuation

compression. 3i shares continue to trade at 0.9x P/NAV, vs its average historical (GBp) Previous Current

premium of ~20% over the past decade. We estimate 3i’s current share price implies 2027E Rev (£m) 6,015.6 6,402.1

a~16x EV/EBITDA valuation on Action, below its 18.5x through-the-cycle valuation. In our 2028E Rev (£m) 6,277.8 6,293.1

view, this discount is excessive given Action's attractive growth profile and substantial 2029E Rev (£m) 7,193.9 7,199.8

runway for expansion. We expect a rerating to be driven by 1) recovery within France and 2027E EPS 581.55 616.66

Germany, where trading has been affected by a weaker macroeconomic backdrop, 2) 2028E EPS 612.46 609.45

significant whitespace opportunity, with continued store expansion underpinning a 2029E EPS 704.04 699.61

c.15% sales CAGR over 2025–28E, and 3) geographic expansion broadening TAM.

Christiane Holstein >>

LFL momentum implies recent ~6.2%, raising FY to 4.1% ResearchMLI (UK) Analyst

Action reported 3.3% YTD LFL growth (week 25 or 21st Jun) at its AGM. This implies a +44 20 7996 1011 christiane.holstein@bofa.com

meaningful acceleration to approximately 6.2% LFL growth during weeks 20–25, Hubert Lam >>