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On Monday, Citi analysts increased the price target for 3i Group PLC (LON:III:LN) stock to £50.00 from £48.50, while maintaining a Buy rating. The updated target reflects a positive outlook for Action (WA:ACT), a key component of 3i Group’s portfolio.
The analysts highlighted the accelerating pace of new store sales for Action, noting that while reallocating from like-for-like (LFL) sales to new store sales creates a 60 basis point drag on LFL sales growth, it is ultimately value accretive. The LFL sales growth is now projected to be 7.7% for 2025, down from a previous estimate of 8.6%.
Strong demand in Switzerland and Germany contributes to a positive long-term store density outlook for Action. The analysts believe that Action’s assumptions regarding available market space are conservative, supporting potential future growth.
Key performance indicators (KPIs) for Action are expected to be reported on June 26, and recent weather trends suggest a potential increase in LFL sales growth from the 8.1% observed in weeks 13-19. While the overall estimates for Action remain largely unchanged, the analysts noted that modestly lower risk-free rates have contributed to the revised price target.
3i Group’s stock continues to be recommended as a Buy by Citi, driven by the promising performance and growth potential of Action within its portfolio.
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