UBS reiterated its buy rating on 3i Group PLC (LSE:III), the FTSE 100 investment company, after its proprietary spending data pointed to stabilising sales trends at Action, the discount retailer that dominates the group’s portfolio.
The bank’s Evidence Lab consumer transaction monitor showed positive year-on-year growth for Action in France and Germany during July, though softer than an unusually strong June that was helped by air conditioning sales.
UBS holds a 3,200p price target on the shares, implying roughly 15% upside to the 14 August close of 2,785p.
Action accounts for more than 70% of 3i’s portfolio and gross investment returns, making the retailer’s like-for-like performance the central driver of the shares.
Growth at Action slowed sharply late last year, prompting a share price fall from a February peak above 4,000p, but the transaction data has shown a gradual recovery in France since October.
UBS said the French improvement appeared to be outpacing discount retail peers since around February, while German trends broadly tracked the wider sector, suggesting the earlier weakness reflected macroeconomic pressures rather than company-specific problems.
The bank forecasts 4.2% like-for-like growth at Action for the 2026 calendar year, requiring a pickup from 3.6% delivered in the first half.
It expects the year to March 2027 to mark a trough for both Action and 3i before a recovery.
UBS pointed to 3i’s half-year results, due in November, as the next opportunity for the market to gauge whether pricing measures taken in France are feeding through.
