Eurocash SA (EUR), Poland’s biggest distributor of non-durable consumer goods, declined for the first time in five days after Citigroup Inc. downgraded it from neutral to sell “on strong share performance.”
The stock slumped as much as 3.1 percent, and traded 1.4 percent lower at 47 zloty as of the 5:30 p.m. close in Warsaw trading. Today’s volume on the stock was about 162 percent of the three-month daily average, according to data compiled by Bloomberg. The distributor has gained 7.6 percent this year, compared with a 0.8 percent loss for the benchmark WIG20 Index.
“With the Polish economy slowing, we expect all key players in the market to invest in price discounting,” Piotr Zielonka, a Warsaw-based analyst at Citigroup said in a research today. “We believe Eurocash is also decreasing prices for its franchise stores to be more competitive, which is putting pressure on the company’s margins.”
Polish economic growth will slow to 1.8 percent this year due to weakening exports and domestic demand, according to European Union forecasts. That compares with 0.1 percent expansion projected for the 17-country euro area.
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