Cyfrowy Polsat confirmed at HOLD, TP PLN 30.0 - Slowly but steadily moving forward
We update our forecast ahead of the 4Q 19 results release and increase our target price from PLN29.0 to PLN 30.0, but keep our HOLD recommendation unchanged.Outlook for 2020e: After negative dynamics of EBITDA adjusted for the Netia acquisition and the IFRS 16 impact in the past quarters, we reckon with a recovery in 2020e. In 2019 the company faced pressure on its mobile voice revenues and invested in sports content, while in 2020e higher ARPU of its smart DOM clients and improvement of pricing trends on the Polish mobile market should result in a moderate improvement of EBITDA by 2% yoy to PLN 4.27 bn. We also see small scope for improvement thanks to synergies with Netia. Advertising revenues could marginally grow, but we would not bet on any meaningful growth. At the same time the risk of a temporary deterioration in economic activity that would affect advertising has recently increased.
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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