Key Takeaways
- • Standard Chartered added 3i Group to its conviction buy list on 8 April 2025 with a 12-month target price of GBP 48, up from GBP 45.
- • 3i's NAV per share rose to GBP 24.57 in Q3 FY25 from GBP 22.61 in Q2, with a total return of 20% for the nine months to 31 December 2024 versus 18% a year earlier.
- • Action, the Benelux discount retailer making up 70% of the investment portfolio, grew 12-month net sales 22% and operating EBITDA 29% year on year.
- • 3i's cash rose to GBP 792m from GBP 386m, net debt stood at GBP 396m, and gearing was 2%.
- • Standard Chartered raised its FY25 EPS estimate to GBP 5.30 from GBP 4.85 and FY26 EPS to GBP 5.60 from GBP 5.50, citing expected rate cuts that could support private equity realizations.
Summary
Standard Chartered's equity research team, led by Head of Equity Strategy Daniel Lam, added 3i Group plc to its conviction buy list in a note dated 8 April 2025. The bank set a 12-month target price of GBP 48, up from GBP 45. The rationale rests on expectations of a steeper interest rate cut cycle across major central banks in 2025, following tariffs proposed by US President Trump, which the bank says should support a recovery in private equity realizations.
3i, an investment company with private equity and infrastructure assets in northern Europe, the UK and North America, reported NAV per share of GBP 24.57 for Q3 FY25, up from GBP 22.61 in Q2. Total return reached 20% for the nine months to 31 December 2024, compared with 18% in the prior-year period. As of the end of FY24 (March), assets under management stood at GBP 34.7bn. The company holds a 29.2% equity stake in 3i Infrastructure plc.
Action, a Benelux-based food discount retailer with revenues above GBP 5bn a year, accounts for 70% of the total investment portfolio value. Its 12-month net sales and operating EBITDA rose 22% and 29%, respectively. Standard Chartered expects Action's momentum to carry into 2025 given its position in the discount retail segment. The balance sheet also strengthened, with cash of GBP 792m at the end of the period versus GBP 386m at 30 September 2024, net debt of GBP 396m and gearing of 2%, which the bank views as capacity to pursue future investments.
Valuation is based on a consensus FY25 price-to-NAV multiple of 1.9x, above the stock's five-year average of 1.2x, which the bank justifies by improving return potential in the portfolio. The stock scores 4 out of 5 on Standard Chartered's Quant Ranking Tool, a grouping that has historically averaged a 16% annual return. The bank notes that 3i's 12-month forward consensus P/E and expected EPS growth are both below those of its peers.
The note identifies three main risks: weaker-than-expected economic growth, increasing competition for Action, and negative regulatory developments. It also flags ESG risks, including business ethics exposures such as conflicts of interest, fraud, bribery and corruption, across 3i's portfolio companies. The report carries standard disclosures stating that it is not investment advice and that opinions are subject to change.
3i, an investment company with private equity and infrastructure assets in northern Europe, the UK and North America, reported NAV per share of GBP 24.57 for Q3 FY25, up from GBP 22.61 in Q2. Total return reached 20% for the nine months to 31 December 2024, compared with 18% in the prior-year period. As of the end of FY24 (March), assets under management stood at GBP 34.7bn. The company holds a 29.2% equity stake in 3i Infrastructure plc.
Action, a Benelux-based food discount retailer with revenues above GBP 5bn a year, accounts for 70% of the total investment portfolio value. Its 12-month net sales and operating EBITDA rose 22% and 29%, respectively. Standard Chartered expects Action's momentum to carry into 2025 given its position in the discount retail segment. The balance sheet also strengthened, with cash of GBP 792m at the end of the period versus GBP 386m at 30 September 2024, net debt of GBP 396m and gearing of 2%, which the bank views as capacity to pursue future investments.
Valuation is based on a consensus FY25 price-to-NAV multiple of 1.9x, above the stock's five-year average of 1.2x, which the bank justifies by improving return potential in the portfolio. The stock scores 4 out of 5 on Standard Chartered's Quant Ranking Tool, a grouping that has historically averaged a 16% annual return. The bank notes that 3i's 12-month forward consensus P/E and expected EPS growth are both below those of its peers.
The note identifies three main risks: weaker-than-expected economic growth, increasing competition for Action, and negative regulatory developments. It also flags ESG risks, including business ethics exposures such as conflicts of interest, fraud, bribery and corruption, across 3i's portfolio companies. The report carries standard disclosures stating that it is not investment advice and that opinions are subject to change.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.