OREANDA-NEWS. February 10, 2010. The Kopeika franchise is looking to sell 20 of its Moscow stores, Kommersant reported. While both X5 and Magnit are among the possible buyers, we consider the store’s format a better fit for X5. The average store area is 1,000 square meters, and the combined revenue for the 20 stores is approximately US200m (1.5% of X5 2010 revenue), reported the press-centre of OTKRITIE Financial Corporation.

View: We see the news as neutral, though acquisition by X5 would certainly strengthen its position in the Moscow region.

Valuation: X5 currently trades on a 2010 EV/EBITDA of 8.8x, which is at a 22% discount to EM peers.

Action: Overall, we see this news as neutral for the X5's stock and reiterate our BUY rating for it.