FACC confirmed at BUY, TP EUR 14.5 - More visibility post-CMD and detailed cost initiatives
We confirm our BUY recommendation and the TP of EUR 14.50, based on updated estimates and medium-term expectations driven by new information from FACCs 2nd Capital Market Day last Friday. Most notably, we decrease our near-term FY 20e and FY 21e EBIT margin expectations to 6.7% and 7.3% (previously 7.3% and 7.9%). This is compensated for by higher estimates in our extended forecast period from 2023-2031, where the average margin forecast increases from 7.9% previously to 8.6% based on the efficiency improvements measures that FACC is implementing and targets to complete in 2024. The company currently trades at FY 20 and FY 21 PERs of approx. 13.2-15.7x and EV/EBIT multiples of 10.5-13.0x, which are ca. 15% below peer group multiples.FACC AG is an Austria-based company engaged in the aerospace and defense industry. The Company specializes in the manufacture of aircraft parts and components. It divides its business into three divisions: Aerostructures, Engines & Nacelles, and Interior. The Aerostructures division covers control surfaces, fairings and wing components. The Engines & Nacelles division provides engine and nacelles components. The Interior division offers interior design services for commercial aircraft, business jets/private jets, freighters and helicopters. The Company's services range from on-site support with field engineering, spares service, and repairs to assembly training of customer staff for components and systems delivered by the Company. The Company's products are manufactured at four production sites in Austria.
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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