AmRest confirmed at HOLD, TP PLN 27.5 - Enduring the second wave
We update our operating model for AmRest to include 3Q 20 results released on November 10 and confirm our HOLD recommendation with a 12m TP of PLN 27.5 (PLN 51.0). Whilst 3Q 20 figures showcased an impressive recovery from the first wave of the pandemic, the group currently faces headwinds from the second wave which include closures of dine-in facilities in PL, CZ, HU, GER and FRA (i.e. ca. 2/3 of the network) as well as considerable restrictions in Spain (affecting ca. 50% of the dine-in business). On a positive note, the ongoing second wave seems to have a less significant effect on operations than the first one. As of Nov. 9 ca. 90% of AmRests restaurants were open vs. 57% at the end of April, while MTD same-store sales were holding up at a decent level of ca. 70%. The pandemic catalysed the groups delivery and takeaway capabilities (for example, the share of delivery at La Tagliatella tripled vs. pre-pandemic levels to ca. 14%).AmRest is a holding company. Through its subsidiaries, Co. is an international fas-foods and casual dining restaurant operator in Central and Eastern Europe. Co. has been building a portfolio of well recognized power brands such as KFC, Pizza Hut, Burger King, Applebee's and Starbucks based on solid franchise and joint venture partnerships. Co. owns La Tagliatella brand which is being developed as Co. operated restaurants as well as franchised stores. Co. operates almost 700 category Quick Service and Casual Dining restaurants. Co. is based in Wroclaw and operates in Poland, Czech Republic, Hungary, Russia, Bulgaria, Serbia, Croatia, Spain, France and the United States.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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