TX GROUP : Refocus on digital and positioning on classifieds should buoy profitability, but growth drivers remain uncertain in the short term
We are initiating coverage of TX Group (TXG) with a Neutral rating and a target price of CHF 178, based on an SOP approach (after a holding company discount of 20%). The group brings together a number of traditional and digital media assets, mainly in the Swiss market. We are confident in the group's ability to improve its profitability (adj. EBIT margin of 17.8%e by 2027 vs 11% currently), primarily thanks to its digital and OOH activities and solid positioning in classifieds. However, we do not see sufficient growth drivers in the short term to support a further rise in EPS (2024-2027e CAGR of 11%).TX Group AG, formerly Tamedia AG, is a Switzerland-based company that operates as a media company. The Company diversifies its activities into three main segments: Paid Media, Free Media and Commercialisation, and Marketplaces and Ventures. The Paid Media segment comprises daily and weekly newspapers and gazettes, including Annabelle, Das Magazin, Newsnet, Schweizer Familie, SonntagsZeitung and Tages-Anzeiger, among others. The Free Media and Commercialisation segment comprises both print and digital national newspapers and magazines, including 20 Minuten, 20 minutes and heute.at, among others. The Marketplaces and Ventures segment comprises a network of digital platforms, including trendsales.dk, ricardo.ch , tutti.ch, lykke.com and carforyou.ch, among others. The Company serves customers in Switzerland, Germany, and Austria.
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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