Comarch - 4Q18 results: strong operating figures (sales, EBITDA, EBIT, OCF), ahead of expectations
We upgrade our LT fundamental rating for equities of Comarch to a Buy (from Hold) and ST market-relative bias to Overweight (from Neutral), reflecting good business outlook and expected strong financial results going forward. Robust backlog (with, most likely, better yoy structure) coupled with ‘carry over’ of profits on proprietary software license sales from last year soothe the concerns over continuous HR costs up-trend, result in material upgrade in our financial forecasts for the Company (and assessment of the fair value of its stock) and are indicative of favorable yoy profit momentum in the coming quarters. Furthermore, we believe that the upward adjustment to current dividend policy of the Company is imminent (albeit we are not utterly convinced that it takes place already this year). On the risk side, apart from the ‘customary’ items (such as sudden halt to backlog’s growth), we see (i) piling potential contractual penalties (in case of unfavorable court rulings in legal disputes with clients/ contractors) and recent extravaganza of sponsoring OSC Lille of Ligue 1.
Comarch is a producer of IT systems for key sectors of the economy: telecommunications, finances, public administration, large companies and the sector of small and medium-sized companies. A range of Co.'s product offering includes ERP-class and financial and accounting systems, CRM systems and loyalty software, sales support and electronic document exchange systems, knowledge management, Business Intelligence, security and protection of data and many other solutions. Apart from providing IT solutions to its customers, Co. is focused on professional customer service and on providing consulting, advisory and integration services as a uniform package.
BOS Brokerage, with over 20-year experience, offers brokerage services on the Polish capital market to satisfy numerous needs of institutional and retail investors.
Our comprehensive offer includes brokerage services on both the stock exchange and the forex market as well as brokerage services on the energy market, debt and equity issues, distribution of investment funds and assets management.
BOS Brokerage analytical team belongs to the most appreciated and acclaimed on the market. According to Parkiet daily’s poll (as of January 7, 2019), DM BOŚ equity research team was selected by institutional investors as the third best in Poland. Moreover, the team members won several individual best analysts awards, including Sobiesław Pająk – IT (best analyst), media/telco (ranked 2.), strategy (ranked 4.), Tomasz Rodak – video games (best analyst), overall ranked 5., Łukasz Prokopiuk – chemicals (ranked 2.), mining (ranked 3.), Maciej Wewiórski – real estate (ranked 3.).
In August 2017 Parkiet daily indicated DM BOŚ recommendations as the most accurate over 12 months and according to the Puls Biznesu daily (as of April 11, 2017) DM BOŚ research team was the most prolific on the Polish market and issued the biggest number of recommendations (247) in the years 2014-2016.
The analysts handle over 80 companies listed on the Warsaw Stock Exchange.
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