Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

El Puerto de Liverpool SAB de / Equity Bottom-Up

<ul>
<li>We revisit <a href="https://www.smartkarma.com/entities/el-puerto-de-liverpool-sab-de" target="_blank" data-smartkarma-citation="entities:27611:1" rel="noopener">El Puerto de Liverpool SAB de (LIVEPOLC MM)</a> which we highlighted in our thematic research piece <a href="https://www.smartkarma.com/insights/banking-on-retail-a-primer-on-the-credit-operations-of-leading-latam-retailers" target="_blank" data-smartkarma-citation="insights:29464" rel="noopener">Banking on Retail: A Primer on The Credit Operations of Leading LatAm Retailers</a> as not only a leading Mexican department store chain but also the third largest credit card issuer in the country</li>
<li>
<a href="https://www.smartkarma.com/entities/el-puerto-de-liverpool-sab-de" target="_blank" data-smartkarma-citation="entities:27611:1" rel="noopener">El Puerto de Liverpool SAB de (LIVEPOLC MM)</a> shares have underperformed other major LatAm retailers, in part due to concerns about the Mexican macro-economic outlook and also the increase delinquency in its credit card portfolio</li>
<li>We believe that <a href="https://www.smartkarma.com/entities/el-puerto-de-liverpool-sab-de" target="_blank" data-smartkarma-citation="entities:27611:1" rel="noopener">El Puerto de Liverpool SAB de (LIVEPOLC MM)</a> is not only attractive on its modest EV/EBITDA valuation, but that it offers EBITDA growth and that it has a relatively under-leveraged balanced sheet</li>
<li>The shares are beginning to re-rate, as we see that negative revisions to consensus estimates are subsiding and the value versus the retail sector is, we believe, increasingly compelling to investors</li>
<li>Risks include a worse-than-expected GDP growth outlook for Mexico, with lower consumer demand and worsening consumer credit quality as well as a tougher competitive climate in retail, especially in digital marketplace and other online sales venues</li>
</ul>


We revisit El Puerto de Liverpool SAB de (LIVEPOLC MM) which we highlighted in our thematic research piece Banking on Retail: A Primer on The Credit Operations of Leading LatAm Retailers as not only a leading Mexican department store chain but also the third largest credit card issuer in the country

El Puerto de Liverpool SAB de (LIVEPOLC MM) shares have underperformed other major LatAm retailers, in part due to concerns about the Mexican macro-economic outlook and also the increase delinquency in its credit card portfolio
We believe that El Puerto de Liverpool SAB de (LIVEPOLC MM) is not only attractive on its modest EV/EBITDA valuation, but that it offers EBITDA growth and that it has a relatively under-leveraged balanced sheet
The shares are beginning to re-rate, as we see that negative revisions to consensus estimates are subsiding and the value versus the retail sector is, we believe, increasingly compelling to investors
Risks include a worse-than-expected GDP growth outlook for Mexico, with lower consumer demand and worsening consumer credit quality as well as a tougher competitive climate in retail, especially in digital marketplace and other online sales venues


El Puerto De Liverpool: Mexican Retailer in the Value Spotlight

<ul>
<li>
<a href="https://www.smartkarma.com/entities/27611" target="_blank" data-smartkarma-citation="entities:27611:1">El Puerto de Liverpool SAB de (LIVEPOLC MM)</a> is a leading Mexican department stores and apparel retailer. Liverpool is also the third largest issuer of credit cards in Mexico – and the largest non-bank issuer – after BBVA Bancomer and CitiBanamex</li>
<li>Liverpool has a high revenue yield and high-quality consumer credit portfolio. It has relatively low delinquency in its USD1.6bn credit card portfolio, with a 5.2% NPL ratio, and NPL coverage of 2.47x at 1Q19</li>
<li>We do an analysis of Liverpool’s consumer credit business, and estimate that it has a valuation range of USD660m to USD1,500m, equivalent to a range of 7.5% to 17% of the market capitalisation</li>
<li>We believe that Liverpool is an attractively valued equity in the retail space, trading on consensus PE multiples of 13x for 2019E and 11.4x for 2020E, and EV/EBITDA multiples of 8x for 2019E and 7.4x for 2020E</li>
</ul>



El Puerto de Liverpool SAB de (LIVEPOLC MM) is a leading Mexican department stores and apparel retailer. Liverpool is also the third largest issuer of credit cards in Mexico – and the largest non-bank issuer – after BBVA Bancomer and CitiBanamex
Liverpool has a high revenue yield and high-quality consumer credit portfolio. It has relatively low delinquency in its USD1.6bn credit card portfolio, with a 5.2% NPL ratio, and NPL coverage of 2.47x at 1Q19
We do an analysis of Liverpool’s consumer credit business, and estimate that it has a valuation range of USD660m to USD1,500m, equivalent to a range of 7.5% to 17% of the market capitalisation
We believe that Liverpool is an attractively valued equity in the retail space, trading on consensus PE multiples of 13x for 2019E and 11.4x for 2020E, and EV/EBITDA multiples of 8x for 2019E and 7.4x for 2020E


El Puerto De Liverpool; Attractive Value in Retailing and Consumer Finance

Mexico

El Puerto de Liverpool SAB de CV owns and operates retail stores and shopping centers located throughout the major cities of Mexico. The Company's stores sell apparel, novelties, and home items. El Puerto de Liverpool also leases retail space in shopping malls in Mexico.

El Puerto de Liverpool SAB de (LIVEPOLC MM)

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El Puerto de Liverpool SAB de (LIVEPOLC MM)

El Puerto De Liverpool: Mexican Retailer in the Value Spotlight

We revisit El Puerto de Liverpool SAB de (LIVEPOLC MM) which we highlighted in our thematic research piece Banking on Retail: A Primer on The...

Victor Galliano

El Puerto De Liverpool; Attractive Value in Retailing and Consumer Finance

El Puerto de Liverpool SAB de (LIVEPOLC MM) is a leading Mexican department stores and apparel retailer. Liverpool is also the third largest...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)