11.01.2017

Zugemailt von / gefunden bei: Baader (BSN-Hinweis: Lauftext im Original des Aussenders, Titel (immer) und Bebilderung (oft) durch boerse-social.com aus dem Fotoarchiv von photaq.com)

Increase of target price to EUR 44.00

    We confirm our Buy rating and increase our target price from EUR 36 to EUR 44. We increase our applied EV/EBITDA from 5.5 towards the long-termaverage of 6.4 because we think that companies with leading market positions and rising FCF and the related rising dividend should derive multiples at the higher end of their long-term band. We base our valuation on 2018/19 (three quarters in 2018) earnings. voestalpine will report ongoing rising EBITDA. Due to the rising depreciation, EBIT will grow less than EBITDA, but declining debt will have a positive effect on the net financial result. 

    Rising profits and FCF ahead. We expect that rising steel prices, the ramp-up of the HBI plant in Texas and internal measures should support steel margins in the years to come. The ongoing extension of downstream activities should improve profit in the three other areas. We also confirm our view that FCF should increase by EUR 450mn from capex reduction alone.

    Valuation: We arrive at our new target price by applying an EV/EBITDA of 6.4 to our 2018/19 estimates which are ~12% above consensus. The related 18/19 P/E of 11.5 (2017/18: 12.2) includes payments for the hybrid. In ourDCF model, we calculate with an increase of the top line from EUR 10.5bn in 2015/16 to EUR 12.7bn until 2020/21, while the target of the management is approximately EUR 15bn. The calculated average EBIT margin is 8.5%, while the targeted margin is 9% over the cycle.

    The current contract of CEO Mr. Eder ends 2019. He has positioned voestalpine at the high margin end of the steel industry by focusing on highest quality and an ongoing extension of the value chain. And we think that he likes to show that also the latest high investments are paying off and contributing positively to profit and cash flow.

Company im Artikel

voestalpine

Nico Baader (Baader Bank AG), Willi Celeda (Raiffeisen Centrobank AG), Alois Wögerbauer (3 Banken-Generali Investment-Gesellschaft m.b.H.) © C.I.R.A./APA-Fotoservice/Bargad Fotograf/in: Nadine Bargad

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