FACC cut to HOLD, TP 7.0 - Slow industry recovery ahead
We downgrade FACC to HOLD with a new TP of EUR 7.0 (down from EUR 14.5) as a result of the impact of the current crisis on aviation and the expected lengthy recovery for the industry (around 3-5 years). Demand for new airplanes and consequently OEM production rates are set to stay low for an extended period of time and significant cost cuts and possibly a restructuring will be necessary, in our view. Most of those risks are already priced in, in our view, at the current levels, but we point to extremely low visibility and the likely lack of positive triggers that make it difficult at the moment to structure a well founded investment case and recommendation. We derive our target price using average peer multiples over the course of the past four years and a DCF valuation model. While the DCF model reflects the full recovery expectations by 2025, the multiples valuation focuses on FY 21 and FY 22 which are still strongly affected.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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.