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Update to Price Target and Investment Stance:
“We have reviewed our model and maintain our Buy recommendation on PG plc (“PG” or the “Group”) with a 12-month price target of €2.11 from our previous target of €1.90. The increase in our price target primarily relates to the improvement registered by the Group during H1 2020 (year-end 30th April), whereby profitability increased by a healthy level of 28.3% over H1 2019, in line with the positive performance derived from the Group’s franchise operations given that post-refurbishment, the Zara® outlet in Sliema is now operating in a much larger store. Apart from the fact that such products typically involve higher margins than the supermarket chain, the EBIT margin in terms of the Group’s franchise operation is in line with that registered by Inditex Group. This segment represents circa 20% of the PG’s total operations. In terms of the supermarket and associated retail operations, both Pama and Pavi kept o

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