Shoprite Holdings (SHP.JO)
Consumer · JSE · South Africa
Fundamentals
Valuation and ratings
Shoprite Holdings trades at R282.04, close to the R320.00 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 74 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 20.4 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Shoprite Holdings
Shoprite Holdings Ltd, an investment holding company, engages in the food retail and wholesale business in South Africa and internationally. It operates through four segments: Supermarkets RSA, Supermarkets Non-RSA, and Other Operating segments. The company also offers clothing, general merchandise, cosmetics, and liquor products. In addition, it distributes various pharmaceutical products and surgical equipment to pharmacies, hospitals, clinics, dispensing doctors, and veterinary surgeons. In addition, it operates furniture stores retailing products, such as furniture, household appliances, and home entertainment systems. The company operates stores under the Shoprite, Checkers, Checkers Hyper, Usave, Checkers Foods, OK Furniture, House & Home, Shoprite LiquorShop, OK Franchise, Checkers LiquorShop, MediRite, UNIQ, Petshop Science, Checkers Outdoor, Transpharm, Checkers Little Me, Freshmark, Red Star Wholesale, Rainmaker, K'nect, Shoprite Send, Shoprite Cash & Carry, Computicket, Pingo, Shoprite Sixty60 and Checkers Sixty60 brands. The company also operates franchise stores. Further, it provides ticketing, and car rental and accommodation services; stadium management, capacity management, travel management, and access control solutions; and credit financing, financial, and treasury management services. Additionally, it invests in properties; and sells products to franchisees under drop-shipment arrangements. Shoprite Holdings Ltd was incorporated in 1936 and is based in Brackenfell, South Africa.
SHP.JO passes 3 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Common questions
Is Shoprite Holdings (SHP.JO) undervalued?
Against our discounted cash flow estimate of R320.00, SHP.JO at R282.04 is 13% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
What is SHP.JO's P/E ratio?
SHP.JO trades at 20.4 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.