Highlights

  • JPMorgan Cazenove cuts price target by 6% from GBX299 to GBX281
  • FY25 earnings estimates revised HSD-DD% below consensus
  • Sainsbury and Tesco favored over B&M in UK retail sector

B&M European Value Retail SA (LSE: BME) saw its price target trimmed by JPMorgan Cazenove on Thursday, falling from GBX299 to GBX281. The bank maintained its ‘underweight’ rating, citing concerns following a weaker-than-expected FY25 earnings outlook.

JPMorgan analysts noted, “Following weaker-than-expected FY25 earnings, we revise our estimates HSD-DD% below consensus with a revised Sep-26 price target of GBX281.” The term HSD-DD% refers to a high single-digit to double-digit percentage cut in earnings projections versus market expectations, indicating a significant deviation in the forecast.

The investment bank highlighted ongoing concerns around B&M's operational strategy and margin profile. “We continue to see B&M on the verge of a wider strategic/margin reset than both management and market expectations acknowledge/reflect at this juncture,” the report stated. This suggests the bank believes structural changes in the business may be required that are not currently factored into investor models or company guidance.

As part of its broader UK retail sector analysis, JPMorgan expressed a preference for Sainsbury (LSE: SBRY) and Tesco (LSE: TSCO), both of which it continues to rate ‘overweight.’ These peers are seen as offering more visible investment pathways compared to B&M.

The downgrade follows a pattern of cautious sentiment among analysts tracking UK value retailers amid shifting consumer behavior and cost pressures. B&M shares have reflected these concerns, with volatility seen in recent trading sessions.

While B&M has not yet released revised guidance, the market may continue to react to growing analyst skepticism over earnings visibility and margin trends in the coming quarters.