| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | -100 |
| Intrinsic value (DCF) | 1267.67 | 84411 |
| Graham-Dodd Method | 3.10 | 107 |
| Graham Formula | 4.00 | 167 |
Lenta International Public Joint-Stock Company (LNTA.L) is a leading Russian retail chain operating hypermarkets, supermarkets, and online grocery services. Listed on the London Stock Exchange, Lenta serves millions of customers across Russia with a strong presence in both urban and regional markets. The company offers a wide range of products, including groceries, household goods, and electronics, leveraging economies of scale to maintain competitive pricing. Lenta's business model combines large-format hypermarkets with smaller convenience stores, catering to diverse consumer needs. Despite economic challenges in Russia, Lenta has demonstrated resilience through efficient supply chain management and digital transformation initiatives, including e-commerce expansion. The company remains a key player in Russia's retail sector, competing with both domestic and international chains.
Lenta International presents a mixed investment case. On the positive side, the company operates in a defensive sector (retail grocery) with stable demand, supported by its large-scale operations and cost efficiencies. Its beta of 0.69 suggests lower volatility compared to the broader market. However, risks include exposure to Russia's economic and geopolitical uncertainties, high total debt (RUB 148.96 billion), and no dividend payouts. Revenue in 2021 was RUB 483.64 billion, with net income of RUB 12.48 billion, indicating profitability but with potential margin pressures from inflation and supply chain disruptions. Investors should weigh Lenta's market position against macroeconomic and regulatory risks in Russia.
Lenta International competes in Russia's highly fragmented retail market, where scale and operational efficiency are critical. The company's competitive advantage lies in its hybrid store format strategy, combining hypermarkets for bulk purchases and smaller supermarkets for convenience. This dual approach allows Lenta to capture both cost-conscious shoppers and time-sensitive urban consumers. Its supply chain capabilities and private-label products further enhance margins. However, Lenta faces intense competition from well-funded rivals, including global discount chains and domestic leaders like X5 Retail Group. The lack of a strong e-commerce foothold compared to some competitors could be a vulnerability as online grocery adoption grows. Additionally, Lenta's debt levels are higher than some peers, potentially limiting financial flexibility in a tightening credit environment. The company must continue investing in digital transformation and store optimization to maintain its competitive position.