Jeronimo Martins: Strategic Expansion and Margin Resilience Fuel 2030 Ambitions

In the dynamic landscape of European retail, Jeronimo Martins has emerged as a standout performer, blending strategic expansion with disciplined cost management to outpace market expectations. As the company eyes a bold 2030 sales target of €50 billion, its 2025 performance and J.P. Morgan's bullish case are reshaping the narrative for investors. This article evaluates the retailer's growth trajectory, margin resilience, and the catalysts driving its near-term upside.

2025 Strategic Expansion and Financial Resilience

Jeronimo Martins has made 2025 a year of aggressive international expansion. The company opened its first four Biedronka stores in Slovakia and established a distribution center to anchor its entry into the Central European market. This follows a surge in Poland, where Biedronka, its flagship discount chain, added 56 stores in Q1 2025, and in Colombia, where nine Ara stores were launched. These moves underscore the company's focus on high-growth emerging markets.

Financially, the first quarter of 2025 revealed a mixed but resilient performance. While revenue of €8.38 billion fell short of the €8.42 billion forecast, earnings per share (EPS) of €0.22 outperformed expectations by 23.6%. A stable EBITDA margin of 6.3%—maintained through cost control and pricing discipline—highlighted the company's operational efficiency. Shares surged 7.78% to €23.00 post-earnings, signaling investor confidence in its strategic direction.

The CEO also announced a €0.59 per share dividend (€370.8 million total), underscoring the company's commitment to shareholder returns. A cash position of €332 million (excluding IFRS 16 adjustments) further reinforced its financial flexibility to fund expansion while managing a current ratio of 0.61 and moderate leverage.

The 2030 Ambition: A 50% Sales Leap

At the core of Jeronimo Martins' long-term strategy is CEO Pedro Soares dos Santos' vision to achieve €50 billion in sales by 2030—a 49% jump from 2024's €33.5 billion. This ambition is not just a numerical target but a reflection of the company's confidence in its low-price model, which has driven Biedronka's dominance in Poland (30% market share).

The CEO emphasized that the 2030 roadmap will prioritize identifying growth areas over the next five years, with no ruling out acquisitions or agribusiness expansion. To fund this, the company plans to invest €1.1 billion in 2025, matching its 2024 spend, to open hundreds of new stores in Poland, Slovakia, Colombia, and Portugal. This capital allocation reflects a balance between growth and profitability, with a focus on markets where Biedronka's value proposition resonates most.

J.P. Morgan's Bullish Case: Undervaluation and Earnings Upgrades

J.P. Morgan has positioned Jeronimo Martins as a prime candidate for outperformance in 2025. The firm upgraded the stock to “Overweight” and adjusted its price target to €24.80 from €25, reflecting confidence in the company's ability to exceed earnings and revenue forecasts.

The brokerage's analysis highlights several key drivers:
1. Earnings Momentum: JPM forecasts EPS of €1.24 for 2025, 8.6% above consensus, rising to €1.67 by 2027. Net income is projected to grow from €781 million in 2025 to €1.07 billion in 2027.
2. Margin Expansion: Biedronka's EBITDA margin is expected to expand to 7.9% in 2025, supported by cost efficiencies and pricing power. Colombia's Ara chain, nearing profitability, is forecasted to deliver 4.0% EBITDA margins.
3. Valuation Attractiveness: At a 2025E P/E of 19.3x, Jeronimo Martins trades at a 24% discount to Zabka and 28% to Dino, despite outperforming both in earnings growth. JPM argues this undervaluation reflects overly cautious market expectations.

Risks and Near-Term Catalysts

Despite the optimism, risks persist. Rising labor costs and competitive pressures in key markets could squeeze margins. Currency fluctuations, particularly in emerging markets like Colombia and Slovakia, add volatility. Additionally, the company's current ratio of 0.61 suggests limited liquidity buffer against unexpected shocks.

However, technical indicators and JPM's analysis point to near-term upside. Short interest has dropped to single digits of free float, and the RSI of 62 indicates the stock is not overbought. JPM projects a 15% rally to €24.80 by end-2026, driven by earnings inflection and a re-rating of its valuation. The second-quarter earnings report in August 2025 will be a critical catalyst, with JPM forecasting 12% revenue growth and 20% EBITDA growth.

Conclusion: A Strategic Play for Long-Term Gains

Jeronimo Martins' 2030 ambition is underpinned by a proven formula: disciplined expansion, margin resilience, and a low-cost model that thrives in competitive markets. While risks like inflation and margin pressures linger, the company's financial health and JPM's bullish case make it an attractive long-term investment. For near-term traders, the stock's valuation discount and upcoming earnings catalysts offer a compelling entry point.

As the retail sector navigates a challenging macroeconomic environment, Jeronimo Martins' strategic clarity and operational discipline position it to outperform peers. Investors with a 3–5 year horizon may find the company's 50 billion euro vision—and the steps it's taking to realize it—particularly compelling.