Seven & i Holdings: Conclusion of discussions regarding potential investment in European convenience store operator Quick Note

研报英文原文证据摘录

Seven & i Holdings: Conclusion of discussions regarding potential investment in European convenience store operator Quick Note

ate Rating Target price Closing price

18-May-26 2,000 1,878.5

03-Mar-26 Neutral 2,073.0

03-Mar-26 2,400 2,073.0

25-Nov-24 Suspended 2,548.0

23-May-24 2,600 2,030.0

31-Jan-24 2,533 1,952.0

06-Nov-23 2,500 1,873.3

For explanation of ratings refer to the stock rating keys located after chart(s)

Valuation Methodology Our target price is ¥2,000, derived by adding the contribution of equity-method income to the

theoretical share price we obtain by applying an EV/EBITDA multiple of 6–7x to our 28/2 forecasts. We apply a 20–30%

discount to the average EV/EBITDA of around just under 9x on FY27 forecasts for retailing companies under our coverage. We

forecast a medium-term EBITDA CAGR of around 6–7% for retailers under our coverage. We expect Seven & i Holdings'

medium-term EBITDA growth to be lower than the average for the retailers we cover (we forecast EBITDA growth of around 4%

in 29/2), as the company already has a large number of stores and we see limited scope for growth in the Japanese

convenience store market due to competition with other retail formats. We think a discount versus the retailing sector average is

warranted in view of low growth potential and the risk of volatility in gasoline-related earnings in North America. For the

contribution from equity-method income, we apply a P/E of 15x to our 28/2 forecast with regard to equity-method income,

referencing valuations for retailers under our coverage.

Risks that may impede the achievement of the target price Upside/downside risks to our target price include: (1) a better- or

worse-than-expected consumption environment and accompanying improvement/deterioration in convenience store demand,