DO & CO : First Class catering with potential for higher share price altitude
We initiate coverage with an Outperform rating and a TP of € 240. DO & CO is a fast-growing premium catering group (20% sales CAGR since FY 2019-20) that should continue its revenue growth path to € 3.0bn (8.8% CAGR) and EBIT margin expansion from 8.0% in FY 2024-25 to 9.0% by FY 2027-28e based on its focus on freshly cooked, high-quality catering as well as procurement and automation-related cost savings. This should translate into a 12% EPS CAGR out to FY 2027-28e. The group’s shares currently trade at 7.0x forward EV/EBITDA, 30% below the 10-year average, despite a markedly reduced risk profile and a deleveraged balance sheet (FY 2025-26e net debt/EBITDA incl. IFRS 16: 0.3x).Do & Co AG is a foodservice company. Co. maintains three business divisions. Its Airline Catering division provides gourmet food for passengers of airline companies such as Austrian Airlines, Turkish Airlines, Air France on long-haul flights. Co.'s flying cooks prepare fresh meals on-board. The International Event Catering division provides services such as handling the menu and the provision of food for sporting events, including tennis and golf tournaments, skiing events and Formula One Grand Prix races. The Restaurants, Lounges & Hotel division operates three restaurants; five restaurants with bars and one at the Casino Baden, and three bakeries under the Demel brand.
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
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