RBC Lifts Price Target, Estimates for B&M European Value Retail as Turnaround Plans Advance

04:21 AM EDT, 09/07/2026 (MT Newswires) -- RBC Capital Markets raised its price target and earnings forecasts for B&M European Value Retail (BME.L), noting the UK-listed discount retailer's ongoing turnaround strategy. "We think there is real momentum in the business, with morale amongst store managers improving, [stock keeping unit] rationalisation nearing completion, availability improving and B&M moving into phase 2 of its turnaround plan (new store format, frozen, self-checkouts etc). However, we think [like-for-like] progress will be steady (sustainably positive by the end of FY27) and there's no trading update scheduled until Nov 12. There is an accounting session due on Sept 17 as B&M transitions from EBITDA to [profit before tax] as its main financial KPI," according to a European retailer-focused note published Monday following RBC's UK homewares pricing survey. Against this backdrop, the research firm boosted its EPS projections for fiscal 2027 and 2028 by 2% to 3%, citing "slightly higher" like-for-like and margin expectations due to non-food segment performance. RBC also increased the outperform-rated stock's price target to 2.75 pounds sterling from 2.40 pounds. "B&M has a strong track record on buying and offers SKU discipline and tight cost control. B&M should benefit from consumers remaining value conscious and should have some runway for growth given it has only 2% share of UK retail overall. Although recent UK LFL trends have been subdued (-2.3% yoy in Q1), we expect a gradual improvement driven by an improvement in value for money perception, helped by recent price investments, better availability and ranges, sku rationalisation and stronger retail execution. We think BME could look to commence share buybacks in due course when it has surplus capital to return," the note said.