Migros Ticaret AS, a Turkish supermarket chain, rose the most in five months in Istanbul after Citigroup Inc. initiated coverage of the stock with a “buy” rating saying the price doesn’t reflect cash flow.
Migros jumped 1 lira, or 6.7 percent, to 16 liras at 3:56 p.m. in Istanbul, the biggest increase since May 25. Citigroup gave a 12-month price estimate of 20 liras for Migros shares, it said in an e-mailed report today.
“The share price is yet to react to the company’s superior cash flow generation, strong positioning in supermarkets, improving margin outlook and defensive nature,” Citigroup analyst Mehmet Colakoglu said in the report from Istanbul.
Owner BC Partners Migros may also sell its stake in Migros “later rather than sooner” as the return from Migros is “lower than the 30 percent return recorded in private equity deals in Turkey and similar to food-retail private equity transactions,” Colakoglu wrote.