Migros Target Price Update

MGROS announced its 4Q24 financial results below market expectations and our estimate, reporting a net profit of TL731 million, down 37% year-on-year. The lower-than-expected net profit was mainly driven by deferred tax income and net financial expenses. On the other hand, strong operational margins, which exceeded market expectations, and the company’s 2025 guidance are expected to have a more positive impact in the long run. Accordingly, we revise our 12-month target price for MGROS from TL705.00 to TL854.00 while maintaining our "BUY" recommendation, we will also hold it in our portfolio. Our target price implies a 48% upside potential, while the company is trading at 13.2x P/E and 4.3x EV/EBITDA multiples based on our 2025 estimates.