Target cut by -51.0% (Gaussin)
TARGET CHANGECHANGE IN TARGET PRICE€ 0.25 vs 0.50 -51.0%
As we have reduced our forecasts for 2017 and 2018 (we now expect negative EBITDA and earnings for these two years), the peers-based valuation method suffers: as EBITDA is forecast to remain negative over the next 18 months, the EV/EBITDA valuation generates a nil valuation, which is a very penalising due to its weight in the overall target price. In a similar way, the P/E valuation gives a 50% valuation compared to the current share price.
CHANGE IN EPS2017 : € -0.11 vs 0.00 ns
2018 : € -0.04 vs 0.04 ns
Following, the publication of the H1 results, we now expect a negative adjusted net income of c.€9m.
CHANGE IN NAV€ 0.51 vs 0.67 -24.0%
Following the publications of the H1 results, we have revised our model. The issue of a convertible bond could result in additional dilution for current shareholders of c.27m new shares should the stock price remain stable over the following 18 months. We now expect something like 150m shares at the end of 2019. The change in the number of shares explains all the decrease in the NAV valuation.
CHANGE IN DCF€ 0.35 vs 0.74 -53.0%
Concerning our DCF valuation, we remain convinced that Gaussin could hit c.€100m in revenue by 2027. However, as for the NAV, the convertible bond issued in June has a negative effect on our valuation. But we have also reduced the perpetual EBITDA margin from c.24% in 2027 to c.17%. This effect is the major component in the decrease in our DCF valuation.
Gaussin SA. Gaussin SA is a France-based company that is principally engaged in the design, manufacturing and marketing of industrial and port trailers and self-propelled barges. The Company manufactures trailers and other transport solutions for use in the industrial sector and the shipping and aviation industries. Gaussin SA sells and leases its products to clients and also provides after-sales services and replacement parts. It is present in such markets as transportation, raw materials and manufacturing, as well as the environment. In addition, the Company offers various services, including audit, rental, training, credit, maintenance, and 24 hours servicing. Gaussin is present through sales networks throughout the world. The Company operates through a number of direct and indirect subsidiaries, including Event, Leaderlease SA, SCI Hall 7, SCI Hall 8, and affiliated companies, such as Metalliance, Sofimmob and Triangle SCES Industrie.
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