Hornbach: Can you build on this stock?

Last Updated: 10. Januar 2024By

Hornbach is as well-known as Obi as a hardware store โ€“ partly thanks to its unconventional advertising. However, looking at the chart below, there is less enthusiasm. Should you invest in this stock now?

140 hardware stores in Europe The Hornbach Holding AG & Co. KGaA is the parent company of the Hornbach Group and owns various subsidiaries in the trade and real estate sectors. The most significant and largest subsidiary is Hornbach-Baumarkt AG, which operates extensive hardware stores with integrated garden centers at home and abroad.

Minimal profit increase despite decline in sales For the third quarter, the company reported a turnover of 1.49 billion euros compared to 1.55 billion euros a year ago. Net profit amounted to 28 million euros compared to 27.2 million euros a year ago. This means that the company’s results have only slightly improved.

Cautionary outlook for the new year Along with the quarterly figures, Hornbach also provided a forecast for the new year. According to this, turnover in the twelve months until the end of February 2024 is expected to remain slightly below the previous year’s value of just under 6.3 billion euros. Adjusted operating profit is likely to land in the lower range of the target range that was already lowered in September.

Potential for stock price to reach 100 euros Despite disappointing figures, conclusion: The challenging conditions due to the continued high inflation and resulting weak buying interest can be seen in the chart. However, analysts mostly see potential for an upward trend. 2 out of 4 analysts recommend buying, and 2 analysts recommend holding. The average analyst target price is 80.5 euros, with the highest at 98 euros. Looking at the valuation, it is clear that Hornbach is actually very cheaply valued with a P/E ratio of 6.4 based on profit estimates.