Aluflexpack confirmed at HOLD, TP CHF 33.5 - Compelling growth prospects reflected in elevated valuation
Aluflexpack announced a sizeable expansion programme at two Croatian sitesInvestment of EUR 65 mn should translate into annual revenues of more than EUR 100 mn by 2025
The balance sheet offers ample leeway for the investments. The management guided that net debt/EBITDA should remain below 1.0x even at the peak of the investment activity
We maintain the HOLD recommendation but raise the target price to CHF 33.5 from CHF 22 due to a combination of higher underlying estimates, the inclusion of the acquisition of Top-System, the earnings accretion of the capacity increase and an amended valuation approach
We appreciate the organic growth acceleration but even on our raised estimates the current valuation is no longer compelling, in our view. FY 21-22e EV/EBITDA multiples of 11.2x and 10.2x (referring to reported EBITDA) imply a roughly 25% premium to the peer group
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